BDO to stop dealing with four Sekunjalo companies
Accounting and advisory firm BDO is putting an end to its professional relationship with a number of companies that come under the Sekunjalo Group, following increased scrutiny that the group has been facing relating to market manipulation allegations. BDO has declined to comment on its motivation.
The professional services firm announced that it would not renew its existing contacts with the various Sekunjalo companies that it works with. According to a statement made by BDO South Africa to its partners, the decision is said to have been arrived upon through “careful consideration by our executive committee.”
Sekunjalo Group is a South African investment holdings firm that has an extensive portfolio, ranging from asset management & financial services to biotechnology, civil security; defence and ecommerce, among others. The group’s investments stretch beyond South Africa into Switzerland, Dubai and Mauritius as well.
BDO partners with a number of Sekunjalo companies, and will now part ways with four of these and their subsidiaries. These are: African Equity Empowerment Investors; AYO Technology Solutions; Independent Media Group; and Premier Fishing and Brands.
According to a Sekunjalo statement, the non-renewal is not indicative of poor relations between the two firms. “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,” said the firm.
“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,” it added. The existing contracts with BDO are set to expire on the 1st of December this year.
BDO, meanwhile remained reluctant to furnish details of the move. “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,” said BDO CEO Mark Stewart.
Speculation is that the move is motivated by the scrutiny that Sekunjalo has come under. As part of the audit sector, BDO would be keen to distance itself from any conspicuous activity, given that auditing has come to be viewed with remarkable suspicion in the South African market after a series of scandals has unfolded.
