BDO SA has initiated disciplinary action against its suspended head of actuarial services, Yashoda Ram, over alleged gross misconduct related to her role as the provisional curator of embattled underwriter 3Sixty Life.
Ram was suspended by BDO, a global audit, tax and advisory group, on February 17 after the Prudential Authority (PA) took legal action to have her removed as provisional curator of 3Sixty Life over alleged discrepancies in the representation of her qualifications.
3Sixty Life, which is ultimately owned by the investment arm of the National Union of Metal Workers of SA (Numsa), was placed in curatorship in December 2021 at the PA’s request. The underwriter has also been implicated in a Deloitte report for questionable transactions, that include a R40,000 payment for the birthday party of Numsa general secretary Irvin Jim.
BDO SA said in a statement on Tuesday that it informed Ram on March 11 of the disciplinary inquiry, which is related to alleged gross misconduct as a result of breaches of duties and contraventions of the firm’s policies. It said these issues were separate and in addition to the matters that gave rise to her suspension on February 17.
“BDO views the alleged gross misconduct on the part of Ms Ram in a most serious light given her position with BDO, as well as the powers and duties of a curator as set out in the Financial Institutions Act, specifically the requirement to at all times exercise the powers and carry out the duties honestly, fairly, with due care, skill and diligence and in the best interest of the institution and investors,” the firm said in its statement.
“The firm, its partners and the relevant BDO team members as well as other staff continue to provide the necessary support services as required by the PA in support of the interim curatorship of 3Sixty Life.”
Ram was appointed provisional curator of 3Sixty Life in late December 2021 after an urgent application by the PA, which said the underwriter had failed to maintain minimum capital and solvency capital requirements, as prescribed by the Insurance Act.
However, the regulator of financial services made a surprise about-turn in mid-February when it applied to the high court to have Ram replaced as provisional curator on the grounds that her qualifications had been misrepresented.
In its court papers, the regulator argued that Ram did not have a degree in actuarial science and also did not complete the Certified Enterprise Risk Actuary (Cera) course in 2016 as indicated on her resumé, which was attached to its original 3Sixty Life provisional curatorship application.
That led BDO to suspend Ram while its head of financial services, Pierre Jacobs, filed an answering affidavit to the court in response to the PA’s application to have her replaced.
In his affidavit Jacobs acknowledged that her resumé submitted as part of the regulator’s original curatorship application was inaccurate. Jacobs’s affidavit states that her resumé should not have suggested that she had completed the Cera qualification and that it also should have specifically indicated she was a “student member” of the Actuarial Society of SA (Assa).
Student members and technical members of Assa are not actuaries and may not use the title, which is reserved for fellows or associate members.
While BDO SA has said that it was aware that Ram did not hold an actuarial degree and that she had not claimed to the firm to hold such a degree or any degree for that matter, Assa has confirmed to Business Day that only qualified actuaries can hold the Cera qualification.
While the high court heard arguments for and against 3Sixty Life’s provisional curatorship on March 22, judgment has not yet been handed down.
Court documents posted on the website of the Reserve Bank, under whose authority the PA falls, allege that Ram had leaked confidential documents related to the 3Sixty Life matter to a journalist at amaBhungane.
Affidavits filed by colleagues at BDO SA also allege that Ram had locked out members of the firm’s support team from the 3Sixty Life Vox email archive system. These members were part of the BDO team that was meant to assist her in the 3Sixty Life curatorship.
“The court case between the PA and 3Sixty Life is ongoing and matters between BDO SA and its clients are confidential,” BDO said on Tuesday. “As such, we are unable to comment further.”
Calls to the mobile phones of Ram and her lawyer were not answered, while an automated response from Ram’s BDO email address says she is on sick leave. At the time of publication neither Ram nor her lawyer had responded.
Correction: May 4 2022
This story has been corrected to reflect that the March 22 court hearing related to 3Sixty Life’s curatorship and not Ram’s role as provisional curator.
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