South Africa’s Independent Regulatory Board for Auditors (Irba) has permanently barred former KPMG audit partner Sipho Malaba from practising as an auditor over his role in the VBS Mutual Bank scandal.
Malaba was also ordered to pay R10.8 million, which includes fines of R1.6 million and legal costs exceeding R9.2 million. The matter has additionally been referred to the National Prosecuting Authority for possible further action.
The ruling relates to Malaba’s role in signing off on VBS Mutual Bank’s 2017 financial statements with an unmodified audit opinion, shortly before the bank collapsed in one of South Africa’s biggest financial fraud cases.
Irba’s disciplinary panel strongly criticised the former auditor, describing the matter as a serious failure to uphold integrity, independence, and professional scepticism expected within the auditing profession.
According to findings, sufficient audit evidence was not obtained in several critical areas, including loans, deposits, related-party dealings, journal entries, impairments, and going-concern assessments.
The panel also noted that the South African Reserve Bank had previously raised concerns about VBS regarding weak governance, poor controls, and compliance failures, but these warnings were allegedly not adequately reflected in the audit process.
VBS Mutual Bank later became the centre of a massive looting scheme in which more than R2 billion was allegedly siphoned through fraudulent deposits, fictitious loans, insider dealings, and governance failures.
Several people connected to the scandal have already been convicted or fined. Former chairman Tshifhiwa Matodzi was sentenced in 2024 after pleading guilty to multiple charges including fraud and corruption.
The case has reignited scrutiny of the auditing profession in South Africa, particularly the responsibility of major firms in detecting financial misconduct.
Observers say the ruling sends a strong message that auditors can face serious personal consequences when they fail in their duty to protect the public interest.
Source: Thepressradio.com
