South Africa news June 12, 2011

Minister calls meeting over fresh CSA bonus claims

South Africa's sports minister Fikile Mbalula has sought a meeting with top Cricket South Africa officials, including its chief executive Gerald Majola, later this week following allegations of improperly awarded bonuses that were decided on two months ago. This is the second bonus-related issue CSA has been embroiled in over the past year.

The Sunday Times newspaper reported that a total of Rand 1.9 million (US$271,428) was awarded to Majola (R1.4 million, US$200,000), Kass Naidoo, brand and communications manager, (R200,000, US$28,571) and Nassei Appiah (R300,000, US$42,857), chief financial officer, without the board's approval. CSA, which has rejected claims of impropriety, said in a statement that the bonuses were decided on at a meeting held on April 15, where annual increases, salary adjustments and annual bonus payments were discussed.

"The payments were issued through the remunerations committee (Remco) so there really shouldn't be a problem," a CSA insider told ESPNcricinfo. However, John Blair, chairman of the audit committee, indicated that proper procedure had not been followed because, "everything must be referred back to the board. These bonuses have not been approved by the board."

CSA reported their highest ever increase in income for the financial year ending April 2011, with revenue going up from R497 million (US$71 million) to R727 million (US$103.85 million). The hike was due to the hosting of the Champions League Twenty20, the Indian tour and the Makhaya Ntini T20 farewell match and concert held at Moses Mabhida Stadium in January.

"It was agreed that in the current market conditions a general salary increase of seven percent should be awarded," Appiah said in the release. "It was also established that certain members of staff were being paid below the salary rates applicable to their positions. It was also agreed that bonuses should be performance-driven. In these circumstances the bonuses were well-merited and were approved by the chairperson of Remco."

The seemingly large amounts paid out have been defended by CSA sources, who said that that the body enjoyed an "outstanding" year and that "the IPL bonuses were taken into consideration when awarding bonuses this year." Despite that, some board members felt that there should have been a cap on the bonus amounts.

The board has asked Remco to re-look at their processes. A meeting will be held later in June to discuss "a framework for salary increases and bonuses," according to the release.

This issue closely mirrors last year's bonus affair, when R4.7 million (US$671,428) was paid to 40 staff members after the hosting of the IPL and the Champions Trophy in 2009. Those payments were not declared through Remco and only picked up after CSA's auditors, Deloitte, found irregularities in the body's financial statements.

Insiders said that the payments were in keeping with precedents set in 2007, regarding the issuing of bonuses following major tournaments. CSA President Dr Mtutuzeli Nyoka called for an external investigation at the time but CSA held an internal inquiry, chaired by vice-president AK Khan, because it believed it had not exhausted its own procedures.

The Khan commission found that "in future, matters of this nature must be signed off by a member of Remco," without making mention of board approval, except where event bonuses for major tournaments, outside of the usual incoming tours, are concerned. In a recommendation, it said that "management of events be regulated by a comprehensive system of control accounting and that full and proper reports be furnished to the board during and at the conclusion of the event."

CSA has said that Remco chairperson Thandeka Mgoduso did sign off on the 2011 bonuses, but made no mention of whether the board was informed of bonuses relating to the Champions League, which could prove central to the most recent scandal.

The Khan commission had cleared Majola of any wrongdoing but the issue formed the kernel of a protracted battle between Majola and Nyoka that saw Nyoka removed as president after a vote of no confidence was passed against him in February this year. The decision to remove Nyoka was found to be unlawful by the South Gauteng High Court and he was reinstated in May. The court judgment also made provisions for Nyoka's request for a full forensic audit to take place.

CSA appointed KPMG on May 23 to conduct the audit /southafrica/content/story/516392.html, which is expected to take four weeks. Their mandate is to "to investigate and report on the payment of bonuses, travel expenses, related expenditure and fringe benefits to CSA staff members in connection with the IPL and Champions Trophy hosted in 2009," which was does not cover the latest allegations.

KPMG reportedly wrote a letter of complaint to the board, saying that there was too much interference from CSA in their work. Blair rejected the seriousness of such allegations, saying, "There was a bit of miscommunication between the office and KPMG. The office wasn't sure what information it needed to give KPMG." CSA currently have both KMPG and the South African Revenue Service auditing their books.

Firdose Moonda is ESPNcricinfo's South Africa correspondent