SAICA Vs Sithole – We Release Some Emails

By Pinky Khoabane

SAICA’s executive director Chantyl Mulder.

THE South African Institute of Chartered Accountants (SAICA) held a disciplinary hearing against chartered accountant Khaya Sithole last week Friday, giving members very little time to file questions ahead of tomorrow’s Annual General Meeting (AGM). SIthole is accused of acting without integrity and adding on a total of 129 students to the Thuthuka Bursary Fund, (TBF) during his tenure as the fund’s Wits University co-ordinator. The TBF is co-funded by SAICA and the National Student Financial Aid Scheme (NSFAS).

Sithole’s affidavit in response to the accusations is explosive, giving insight into gross misuse of power by top officials involved in the scheme, who often instructed him to add-on students, some of whom didnt qualify for the programme and were outside the budget allocation. He accuses Wits Vice Chancellor Adam Habib, Associate professor Nirupa Padia, head of School of Accountancy at Wits, SAICA CEO and TBF Trustee Terrence Nombembe, NSFAS Chairperson and TBF Chairperson SIzwe Nxasana, and SAICA’s executive director Chantyl Mulder.

In a response to an article we published on the matter a twitter-handle Wits_News issued a statement which it posted on my Twitter account and tagged Habib. It said “the University categorically rejects the allegations made in recent days by a former employee of the University”

Our response to that statement was that we had emails which we didnt publish at the time because the hearing was still ongoing and we felt publication of the emails might jeopardise the case. However, we have decided to release these emails.

The Case of The Refugee Student

The first set of emails details the intervention by journalist Fiona Forde to have a student who didnt qualify for the Fund due to her refugee status. Forde is very persistent, getting Habib, Deputy Vice Chancellor Tawana Kupe and Head of School of Accountancy Nirupa Padia, to all get involved in what is essentially breaking the rules of the Fund.

In an email of 12 March 2014 into which Padia, Habib and other officials involved in the fund, she writes:

“Dear Khaya

I write (sic) to you on March 4th but have not heard a response since.
Kindly confirm when I can expect to hear from you…..”

The correspondence shows how Sithole, on numerous occasions, brings to the attention of the officials that the rules dont allow students who are not South Africans and the consequences would be that NSFAS wouldnt pay its portion of her fees. But eventually the student was accepted and in one email Sithole tells colleagues that the VC had requested that he put her on the list and he would personally intervene with Home Affairs.

This student had also paid a registration fee which according to the rules, is a not refundable. Again, Forde intervenes, gets Habib, Kupe and Padia to get involved. And the rules are bent again and she’s given a refund. At year-end, as he had warned, NSFAS didnt pay – a matter which Sithole raises with the vice chancellor. Ultimately this student got her ID towards the end of the year, failed Accounting and there was still pressure on Sithole to put her back on the programme for 2015. He refused.

Here’s the full set of emails: Annexure 16 – Habib

In another case, Sithole was asked to add a student on the programme “whose only distinguishing credential is that he was friends with the vice chancellor’s son”.

Here’s the full set of emails dealing with that case: Annexure 17 – Habib_Parktown

Below is an excerpt from a letter Sithole wrote to Nombembe in December 2016, the full letter is attached 

The 2014 cases As soon as I started the job, there was a change in circumstances that I probably wasn’t really prepared for. My understanding has always been that the list of students on the programme is the result of the vetting process that starts from Matric onwards. However, in 2014, I received a request to add a student to the programme whose distinguishing credential is that he was friends with the vice-chancellor’s son. In addition to this, a refugee student was also imposed on the programme on the basis that she had approached the university authorities with her story and had the backing of a prominent media house in championing her cause. Whilst I had conceded on the first student on the basis that I had yet to finalise the list of students for 2014, I strongly objected to the addition of a refugee student who had no South African documentation. In my objection I highlighted that even if SAICA accepted the student, it would be impossible for NSFAS to accept a student who had no valid documentation and was not at that stage – a recognised South African citizen. And – in a moment that will haunt me forever – the words I received were “I will speak to Chantyl.” I therefore added the student to the programme. The difficult part about the student is that by the time she was brought to my office, she had already paid registration fees and was living at home. After adding her to the programme however, I then received additional demands to facilitate the refund of the amount that the student’s family had paid back to her father as he apparently needed it. I again objected as it meant that the eventual exposure to paying for the student would now increase by R10 000. Again the authorities overrode this and the refund had to happen. Unfortunately it got worse. The first student mentioned decided to move into residence. At that stage the only available residence was either South Point or the remarkably expensive Wits Junction – and he insisted on Wits Junction which I had to agree to. Weeks later, the second (refugee) student then decided that she no longer wished to live at home and also decided to move into the expensive residence – and I was again instructed to facilitate this. Naturally, NSFAS rejected the claim for the refugee student and we had to honour all her expenses plus the refund from the Thuthuka account. As I had highlighted from inception that NSFAS would never approve the student but was still obliged to submit a claim. Once the claim had been rejected, we had to honour the bill as the university was no longer in a position to assist as promised. And then the student actually failed. But then I was asked to fund her in 2015 – and I disagreed. Another development of the 2014 year relates to the Zimbabwean students. Essentially the Zimbabwe Presidential Scholarship had underpaid for its students in 2013 before my time. They could therefore not register in 2014. After they approached the head of school’s office, they were sent to my office with the instruction that I was to help them out by facilitating their registration. This again used the SAICA letter as it was the only documentation we had that would be accepted by the university. This idea of assisting students with outstanding balances using the funds in the Thuthuka account became known as the process of assisting students with ‘small balances’ (a term fashioned by the head of school actually). The balances relating to the Zimbabwean students ranged in value and unfortunately the Zimbabwean President’s Scholarship Fund never actually bothered to pay the amounts so the students were funded from the Thuthuka account. Of all the Zimbabwean students, only 1 then decided to volunteer his time during the year to assist with running some of the undergraduate classes for the Thuthuka students. No other recourse existed in respect of the rest of the Zimbabwe group. An additional student of Zimbabwean extraction entered the fray. She is a South African student born of Zimbabwean parents to she actually doesn’t qualify for the Zimbabwean Scholarship. She had also approached the head of school’s office and the instruction was to help her. Since her exposure was the full amount it amounted to R125 000 in 2014 alone. And then she failed. So in 2015 I was repeatedly asked to make funds available to her – and I objected that helping her again would mean that the total exposure to her would be over R250 000 – and I simply felt it was excessive for a non-South African students. Eventually the pressure relented and she was funded through other means. But it definitely did not endear me to the head of school’s office. Beyond the Zimbabwean cohort, there were local students who would also be sent to me via the head of school’s office with the instruction that I was to help them out. And occasionally they failed and a repeat request would be to fund them again – which was always problematic. One odd case related to a student who wasn’t even studying accounting but was once again directed to me with the instruction that I needed to provide the assistance. Later on, this extended to Indian students who were also added on the instruction of the head of school, using the funds in the Thuthuka account and regrettably – whenever I had to execute on such instructions – the same SAICAbranded letter was used. The most contentious part of this development related to the Venkat students. Essentially the CEO of AngloGold Ashanti made a pledge to the university to fund some students. By virtue of his own background as an accountant, he chose to partner with the accounting faculty. Now the issue here is that the students had to be added to the Thuthuka programme in order to receive academic support. In other words, they had to be added to the programme as firm students in spite of the fact that AngloGold is not technically a firm. However, in drafting the initial agreement between the university and AngloGold a few things were missed. Firstly AngloGold decided to fix its contribution to just tuition only – and the rest had to be sourced either from university resources or form Thuthuka funds. The AngloGold commitment therefore did not cover accommodation, textbooks and allowances – these had to be facilitated through the Thuthuka account. I also had an instruction to include the students as part of the NSFAS claim process. These students therefore were an integral part of the programme. And their allowances had to be funded from the Thuthuka account. In 2014, the AngloGold agreement came with no contract. I then suggested that the students had to sign contracts drafted by the university and AngloGold which followed a similar structure to the Thuthuka contract. I eventually sent a copy of the Thuthuka contract so that it could be amended and an AngloGold contract created instead. This was eventually ignored and the students did not sign. Their access into the university was then effected through the SAICA letter. In 2015, the Venkat agreement extended the scope to a much wider student cohort. At this stage, the head of school’s office now included Indian students who were sent to me so I could prepare letters for them. Having highlighted that the Indian student cohort was not in line with the design of the Thuthuka model – the response was simply that the Venkat funding had no racial limitations so I had to add the Indian students on that basis. Curiously, there was still no such thing as a Venkat/AngloGold agreement so the only formal documentation I could use to engage the students legally would be the Thuthuka agreement. It also became clear that the Venkat agreement committed to a fixed contribution each year and I was responsible for funding the rest. In other words, the contribution did not include books, allowances and accommodation – and I was responsible for sorting this out using the Thuthuka account and the NSFAS claims process. Some of the students added in 2015 were continuing undergraduate students who returned in 2016 – and the Venkat funding turned out to have been for 2015 only. The amount spent on these students (20 in total) in 2015 alone was R977 000 in direct costs plus another R120 000 for textbooks – which was all funded from the Thuthuka account and had – by the time I left the university – still not been transferred to the Thuthuka account. The SRC Humanitarian Fund also had a link with the head of school. Occasionally they would send appeals to different heads of schools to assist with students who were struggling financially. The accounting head of school would therefore send these queries to me to resolve. In other words, I was being requested to pay for these students using the Thuthuka funds. Occasionally I had some objections. The one I remember vividly was when a student who had been in the system for 5 years but still had outstanding first year modules was sent to my office through the head of school -and I simply refused to assist on the basis that there were more deserving students who could be assisted. The core of the 2014 beneficiaries were really referrals from the channels I have mentioned. From 2015, the students generally came directly to my office so the balance shifted towards that group rather than the group that had been pushed through by my seniors on campus. The reason I am narrating these particular instances is not to excuse my process of adding students onto the programme without following due process or lend credibility to my actions, but rather to provide the context of the environment in which I was operating. Over time, students would come directly to my office and not necessarily though the head of school’s office first. The essence of the problem is that I did not unilaterally design the process of assisting students using the Thuthuka account but that at no point in time was a limit or a parameter set on who could and could not be assisted. In my case my bias would always be towards the black students mainly because I have a more intimate understanding of their plight. Had I ever earned the right to state my version of the story my position would not be aimed at defending my own behaviour but to simply ask where exactly I was supposed to have drawn the line?

Attachment: Full Letter By Khaya Sithole to Annexure 0 – Letter to Nombembe Dec 2016

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