CSA to seek legal advice after KPMG inquiry

CSA's internal strife is not over. The body will seek legal advice into possible breaches of the South African Companies' Act by chief executive Gerald Majola but there is no money missing from their coffers. CSA will also review their remuneration and travel policy.

Those resolutions were accepted by the majority at a special board meeting in Johannesburg on Saturday where accounting firm KPMG presented their report on CSA's financial affairs. The investigation was expected to be the conclusion of the year-long bonus scandal which started when R4.7 million (US$704,436) was paid to 40 staff members after the hosting of the IPL and the Champions Trophy. Instead, the saga has only been lengthened and will now be passed into legal hands.

"There is possible irregular conduct with respect to the Companies' Act and the fiduciary duties of directors," president Mtutuzeli Nyoka read from a statement. "The breach in terms of the Companies' Act refers to the CEO and the purpose of the legal advice is to ensure we take informed decisions." ESPNcricinfo has learned that it is unlikely that Majola will be fired once the legal opinion has been sourced.

Essentially, the issue of procedure forms the kernel of the findings of the external investigation. Bonuses are usually paid to CSA staff annually but when events such as the IPL or an ICC trophy are hosted by South Africa, staff receive additional payments for their work during these tournaments. Event bonuses are a precedent that have prevailed since the 2007 World Twenty20 and have traditionally not been declared though CSA's remunerations committee (REMCO).

When CSA's auditors Deloitte picked up the payments in July last year, they reported it as an irregularity, and it was decided there would be an external investigation, something Nyoka was in favour of. Eight weeks later, at CSA's annual meeting, a new board was elected and the inquiry was moved in-house. At the time, sources said the decision to make the investigation internal was taken because CSA had not exhausted its own procedures.

A committee of inquiry was appointed under vice-president AK Khan. In November, the Khan Commission cleared Majola of any wrongdoing save for making "an error of judgment" by not declaring the payments through REMCO and ordered him to pay back R28,168 (US$4221) which was used for travel for his children.

The battle did not end there and in February this year, the board passed a vote of no confidence against Nyoka, removing him as their president. Nyoka challenged the decision in the South Gauteng High Court, where it was found that his removal was unlawful and that he should be reinstated. Nyoka also demanded an explanation of the movements of R68 million (US$10.2mn) from a suspense account that was used to fund the IPL. That money has been accounted for by the KPMG audit.

On the same day as the judgement that reinstated Nyoka as president, CSA issued a release stating its intention to appeal the court's decision. They went back on that statement on May 4 at a board meeting in which Majola and Nyoka reconciled "with the best interests of cricket in mind. Nineteen days later, KPMG were tasked with the investigation which was expected to take a month to complete.

Constant delays saw the inquiry stretch over more than two months and the saga is now set to continue longer. The South African Sports and Olympic Committee, the country's chief sporting body which reports to the sports minister, will be enlisted to assist CSA find the appropriate legal expert.

"We have to do it on a very urgent basis," Nyoka said when asked what time frame would be put in place to seek the legal opinion. The advice of lawyers is being sought because of questionable corporate governance which has been plaguing the body's remunerations and travel policies. "We need to set up some committee to make sure we tighten up," Nyoka said.

Nyoka was elected in August last year for a term of two years and was rumoured to be facing a second no confidence vote at the conclusion of this inquiry. With the saga still ongoing, Nyoka is still in office and there was no word on any possible removal.