Public enterprises minister Pravin Gordhan has appointed Clarence Benjamin to the board of embattled state-owned rail, ports and pipelines enterprise, adding much-needed accounting skills to the board.
Transnet said the appointment of Benjamin, a trained chartered accountant (CA), became effective at the beginning of September.
“The appointment was made by the shareholder minister in accordance with Transnet’s Memorandum of Incorporation. Benjamin brings with him extensive experience and expertise in auditing, accounting, compliance and risk management having been in both private and public sectors for over 25 years,” the company said.
The appointment of Benjamin, who is likely to take a role in the key audit committee, comes after Futuregrowth Asset Management, one of SA’s biggest institutional investors in the bond market, raised concern about the composition of Transnet’s audit committee, particularly the lack of chartered accountants. This flies in the face of good corporate governance as stipulated in the King IV report, it says.
The newly constituted audit committee is chaired by Refilwe Buthelezi, an engineer. Other members are Dipak Patel, a chemical engineer; Busisa Jiya, whose expertise includes asset management and banking; Boitumelo Sedupane, whose forte is human resources and training; and Martin Debel, a maritime specialist.
“As institutional investors with a fiduciary duty to our clients, the lack of qualified accountants on such a critical committee does concern us,” Futuregrowth said in a report published by Business Day.
“As investors, we would prefer more representation of suitably qualified accountants on the board, given the complexity and size of Transnet.”
The department said at the time that Gordhan was “engaged in a process to bring on board more accountants to capacitate the board, not just the audit committee”.
To compensate for lack of CAs in the committee and board, Gordhan appointed Zolisa Zwakala, a qualified accountant, to help the board as a consultant.
However, Transnet said on Monday that Zwakala would no longer be advising the board.
“Ms Zolisa Zwakala, who was appointed as an independent adviser to the Audit Committee of Transnet, has resigned from her role with effect from 5 September 2023. Ms Zwakala’s resignation comes as result of changes in her full-time employment responsibilities which will not permit her to continue in the role.”
Audit committees are vital in every company as they are involved in maintaining financial stability. A key responsibility is to prevent misconduct in auditing and fraud in the company’s finances, making the committee crucial in gaining the trust and confidence of investors and stakeholders.
According to Transnet’s latest annual report, the audit committee considers the internal and external audit process, accounting principles and policies.
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