The Independent Regulatory Board for Auditors (Irba) disciplinary hearing against the former auditors of the failed Sharemax property syndication scheme has taken a surprising twist.
Advocate Mike Maritz, appearing for the three auditors, indicated on Friday that he will be filing an application for the recusal of one or more of the members of the disciplinary committee on the grounds of an actual bias relevant to these proceedings or a perceived bias.
This led to the adjournment of the hearing until Monday for the submission of this application.
The former auditors – Jacques Andre van der Merwe, Danie Dreyer and Petrus Johannes Jacobus Bekker – are facing 340, 40 and 33 charges respectively.
They were all directors of ACT Audit Solutions Incorporated at the time they allegedly committed the offences while Van der Merwe was also the managing partner of the firm. All three previously pleaded not guilty to all the charges against them.
The planned filing of the recusal application follows Maritz last week expressing concern about some of the questions and statements that had emanated from the committee members, particularly Sorenzo Sooklal.
Maritz said they are under the impression that these proceedings are to be conducted neutrally, fairly and that the committee members will have an open mind, be independent and reserve their judgment until after conclusion of all the evidence and after hearing all the arguments.
However, Maritz said it seemed to them that they are labouring under a misapprehension as far as this is concerned because Sooklal had made pronouncements which are clearly indicative of wholehearted support of certain opinions expressed by Brian Smith, the expert witness for Irba in the hearing.
Maritz earlier in the hearing also questioned Smith’s independence after it emerged that Smith was chair of Irba’s investigation committee from 2004 until 2016 and chairman of this committee from 2011 until 2016.
Smith further admitted that during the time he was chair, this committee concluded the investigations into the conduct of the three audit practitioners, reached an opinion on their conduct and passed this on to Irba’s disciplinary advisory committee with a recommendation.
“It seems to me on any objective view of your involvement there, that you are … a cog in the Irba machinery. You are disqualified as an expert because of your obvious lack of objectivity,” Maritz said.
In regard to Sooklal, Maritz questioned if the defence team is to be confronted with a situation where mid-stream and long before the conclusion of the evidence, there is a committee member indicating acceptance of a particular witness’s evidence and rejection of any other witness’s opinion in conflict with it.
“How can that be? Then the proceedings would become farcical. And it would amount to this ‘going through the motions’ in the form of window dressing.
“It would mean that the result is a forgone conclusion and I am wasting my time here,” he said.
“This is not how court proceedings or disciplinary proceedings and particular proceedings as important as the present are to be conducted.”
Maritz said Sooklal was dismissive of many of the expert opinions expressed by Professor Harvey Wainer, a visiting Professor at the Faculty of Commerce at the University of Witwatersrand.
Wainer was appearing as an expert witness for the three auditors.
“It is most certainly at this stage our view that Mr Sooklal has disqualified himself completely from further participation in these proceedings,” Maritz said.
‘Full disclosure’ wanted
Maritz said on Friday it had now become of vital importance to demand full disclosure by each member of the disciplinary committee of any or all interactions or contact with Smith, at any stage historically, preceding, leading up to or during these proceedings and full disclosure of any committee or committees any of the present committee members in these proceedings ever sat on with Smith.
In response, disciplinary committee member Horton Griffiths confirmed that between 2007 and 1995 he was a member of the Irba investigating committee, initially as a member but subsequently as chair, and that Smith succeeded him as chair of this committee.