Companies Act, 1973 (Act No. 61 of 1973)Chapter XVB: Financial reporting standards440AA. Investigation of non-compliance |
| 1) | Any person who has reason to believe that a financial report of a widely held company failed to comply with a financial reporting standard may refer the matter to the executive officer of the Panel for investigation. |
| 2) | Every matter referred to the executive officer shall be noted and the following information recorded: |
| a) | the date of receipt; |
| b) | the name of the company suspected of non-compliance; |
| c) | the nature of the alleged non-compliance; |
| d) | the financial report containing evidence of the alleged non-compliance; |
| e) | whether the matter was referred to the chairperson of the Panel under subsection (3) and the reasons therefor; and |
| f) | if the matter was investigated, the report of the investigation committee; |
| g) | the persons to whom the report mentioned in paragraph (d) was published; |
| h) | the date of publication; and |
| i) | if an administrative penalty was agreed to under section 440FF(2), the amount of the penalty agreed upon and how it was calculated. |
| 3) | The executive officer shall within five business days of a matter being referred under subsection (1) assess whether the matter warrants investigation and, if so, submit all relevant information to the chairperson of the Panel, with reference to the financial reporting standards in question. |
| 4) | The chairperson shall within seven business days of receipt of a recommendation under subsection (3)- |
| a) | appoint an investigation committee; and |
| b) | notify the company being investigated. |
| 5) | Members appointed to an investigation committee shall recuse themselves if- |
| a) | they have an interest in the company being investigated or in the outcome of the investigation; |
| b) | serving on the committee would give rise to any other conflict of interest. |
| 6) | An investigation committee shall consist of- |
| a) | one Panel member qualified in law; and |
| b) | two or more Panel members qualified in accounting. |
| 7) | The investigation committee shall- |
| a) | follow the procedures determined from time to time by the Panel; |
| b) | investigate whether there was a failure to comply with financial reporting standards; |
| c) | if necessary, consult with any specialist advisors; |
| d) | assess the materiality of any failure and its prejudice to users; |
| e) | within 18 business days of its commencement, deliver a written report on the findings of its investigation to the executive officer; and |
| f) | if appropriate, make recommendations on how non-compliance may be rectified. |
| 8) | If the committee has not concluded its investigation within the 18 business days contemplated in subsection (7)( e), the committee shall deliver a provisional report, and the executive officer may then allow additional time or otherwise direct how the investigation should proceed. |
| 9) | If the members of the committee did not reach consensus on the fact or extent of the alleged non-compliance, the written report mentioned in subsection (7)( e) must record the different opinions. |
| 10) | The Minister may, in respect of a particular investigation, by proclamation in the Gazette, extend the number of days prescribed in subsections (3), (4) and (7). |