Audit firm BDO South Africa has announced that it will not seek to renew its mandate for several companies within Iqbal Survé’s Sekunjalo Group.
In a note to partners, BDO SA said the decision was made after “careful consideration by our executive committee”.
The four clients that BDO will drop are are African Equity Empowerment Investors and its subsidiaries; AYO Technology Solutions; the Independent Media group and its subsidiaries; and Premier Fishing and Brands Limited.
The Sekunjalo group, meanwhile, responded by saying it had resolved to rotate auditors in any case to give work to black firms, adding it has an “excellent” relationship with BDO.
“Sekunjalo cannot speak for the listed companies under its group umbrella but, as the majority shareholder, Sekunjalo had already resolved that it was not going to support the re-appointment of BDO as auditors to the listed entities in which it has a stake. The board had determined that it is duty bound to seek opportunities for black professionals and blackfirms, especially ahead of the Mandatory Audit Firm Rotation due to come into effect on 1 April 2023.”
Earlier, in a short note written by its SA CEO Mark Stewart, BDO South Africa did not say why it had chosen to not renew its mandate, which is set to expire in December.
“It is important to note that all matters between BDO South Africa and our clients are absolutely confidential and we are bound to respect such confidentiality at all times,” the note said.
The announcement comes a week after the Financial Sector Conduct Authority raided Sekunjalo’s offices in Cape Town in a market manipulation probe. Survé criticised the raid, calling it a “fishing expedition” and has threatened to sue both the regulator and the investigators who conducted the raid. The FSCA has said it would oppose any action.
* Update: This article was updated to include the response of Sekunjalo.