PAAB challenge opens can of worms

The tussle between auditor Hans Hashagen and the Public Accountants' and Auditors' Board (PAAB) is likely to open a can of worms many would have preferred to be kept out of the public domain.

PAAB has charged Hashagen with six counts of misconduct following alleged omissions of crucial documents from a forensic report on alleged shenanigans at the Namibia Financial Services Supervisory Authority (Namfisa) in 2008 and 2009.

Hashagen was then leading the investigation at Namfisa on behalf of auditing firm Ernst & Young (EY).

Former Namfisa CEO Rainer Ritter, who was forced to leave the parastatal following the EY investigation, then lodged a complaint with PAAB, claiming unprofessional conduct by Hashagen over omitted documents and files which he claimed Hashagen had deliberately left out of the report.

Some of the documents allegedly left out of the EY report are explosive testimonies of how Namfisa staff breached security services at the parastatal in an apparent attempt to manipulate or delete evidence.

Namfisa at the time was investigating N$660 million of loans from GIPF's Development Capital Portfolio (DCP) which lenders had defaulted on.



Missing documents

One of the things EY had to do was to verify Ritter's evidence provided to the Namfisa board, which showed that then general manager of investment institutions, Boni Paulino, had removed evidence from a small boardroom at the Namfisa office in the Sanlam building.

This was caught on CCTV, which, according to Ritter, clearly showed Paulino leaving the building on 13 November 2008 with something in his hand.

Although this section of the CCTV data was somehow removed from the Namfisa server, Ritter, suspecting internal corruption then already, used off-site mirrored data to present this evidence.

Paulino had reportedly identified himself as the man in the CCTV footage.

In the summary of its findings EY stated that it could not comment on the validity of the allegation due to the nature of the evidence that supported the allegation.

Ritter reported the tampering with internal CCTV footage storage, as two drives had been deleted.

Furthermore, said Ritter, a full report of South African outfit Babalela Security Services, which did a physical and electronic sweep later that month, was submitted to EY.

Babalela had found “past installation of eavesdropping or covert devices” in the ceiling of the first floor. The wiring of a camera with audio and a connector was also found in the boardroom next to the office of Ritter's secretary, and could eavesdrop on both Ritter's and his secretary's offices.

Ritter said despite sufficient evidence of foul play, Hashagen and EY failed to interview the manager of Babalela, Renier Tredoux, and relied on the inspection of five cables that were in the possession of the Namibian police.

Tredoux reported that the cables were “highly specialised”.

On 15 November 2008 a specialist forensic investigator employed by Namfisa took pictures showing the cables in the boardroom ceiling. However, the Namfisa camera and laptop containing this evidence were later stolen from the Namfisa office.

During that time the investigator was brutally attacked in his home and left for dead; he survived the attack though.

In his testimony to EY Paulino identified himself as the man from the CCTV footage. However, he denied having any knowledge of eavesdropping devices or cables and he said he could not remember if he had removed anything from his office on the night in November 2008.



Ignored

Ritter's complaint is also that EY did not take any statements from him, the specialist investigator, Lily Brandt (former general manager of corporate services) or the police in this matter despite numerous criminal matters pending and being investigated by the police.

He said from the footage it could be seen that Paulino had spent only one minute in his office while having made some effort to drive to the office at 21:00 at night.

Ritter charged that EY and Hashagen had probably wilfully refused to conduct further investigations into Paulino's late-night visit to the Namfisa office despite having been provided with several pieces of evidence constituting a prima facie case of corruption or dishonest conduct, alternatively illegal interception of private discussions and data, or unlawful invasion of privacy.

CATHERINE SASMAN