Johannesburg-Acting chief justice Raymond Zondo has slammed the enabling role played by audit firms PwC and Nkonki in turning a blind eye to the looting that happened at South African Airways (SAA).
PwC audited SAA’s books for five years between 2012 and 2017, at times in conjunction with Nkonki Inc. Zondo in his final report into the malfeasance that took place at SAA took exception to the work done by the two entities.
“PWC and Nkonki gave clean audits to SAA for five consecutive years between 2012 and 2016. During this period, the Board was in a state of precipitous governance decline. It was also engaging in acts of corruption and fraud. None of this was, however, detected by its auditors. Instead, their audit reports each year conveyed to the public that SAA was complying with the law and that irregular expenditure was under control,” the report reads in part.
“PWC and Nkonki failed in their duties as a watchdog institution. Had they performed their functions properly, the shambolic state of financial and risk management in SAA would have been picked up earlier, and could have been addressed. It took the intervention of the Auditor General to finally expose these deep deficiencies.”
In 2020, Pule Mothibe, a partner at PwC conceded to an “omission of duty” in the work performed for SAA between 2014 and 2016 – he was testifying before the commission of inquiry into state capture.
Government has since sold a majority stake in SAA after years of dishing out bailouts to the airliner. Public Enterprises Minister Pravin Gordhan last year announced the sale of 51% of SAA to Takatso Consortium, with the government retaining a 49% stake.
The Takatso consortium comprises Joburg based Global Airways, which owns the recently launched domestic airline Lift, and private-equity firm Harith General Partners.
The key role players in the deal include Lift co-founder Gidon Novick and the politically connected Harith chairman Jabu Moleketi, the former deputy finance minister and former Public Investment Corporation chairman.
Judge Zondo insists that former SAA chairperson Dudu Myeni be charged
Zondo gives whistleblower Athol Williams a glowing tribute
Read part one of the state capture report here
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