Joburg old boys’ club rocked by financial scandal
Old Eds in turmoil with all sorts of allegations flying around
Johannesburg’s legendary Old Edwardian Society has been shaken by members demanding answers from the executive committee after a now jailed administrator stole R2m.
This stems from increasing unhappiness with the alleged failures of the society’s executive to take responsibility for apparent financial administration flaws which led to its previous administrator, Anne Pratt, stealing R2m.
Claims of bad management have been dismissed by the society’s chairperson, Neil Darroch.
Known as Old Eds, the society, which was originally formed for past pupils of King Edward VII School, runs several social and sporting sub-clubs. The facilities, which include a gym and tennis and squash courts, are leased by the society from Virgin Active.
Documents show how last month, during a special general meeting following threats of a motion of no confidence, the executive was forced to accept four new members onto the committee who will have “greater insight” into its workings.
The new members were elected on Tuesday evening. A new executive committee will be elected on December 3.
The special general meeting came after Pratt, a Virgin Active employee, was sentenced in October in the Johannesburg Magistrate’s Court to five years’ imprisonment. She had pleaded guilty to 84 counts of theft, which took place between 2014 and 2015.
The money was stolen from an investment account.
Society member Jeff Shulman wrote an e-mail in October titled The Society is in Crisis.
Shulman declined to comment.
In his e-mail, Shulman states: “A group of senior society members have become so concerned at the state of the society that we felt compelled to act.
“We called for a vote of no confidence in the current executive committee ... ”
Shulman wrote that the “sad reality” was that while the executive committee acknowledged it was ultimately responsible for internal financial controls, “the current executive steadfastly refuses to take any responsibility whatsoever for the frauds under their watch”.
“The ethical action for the executive committee to have taken when it was revealed that the society was without an auditor … and that the financials presented at the Annual General Meeting in 2014 were actually falsified was for the chairman and then treasurer to have stepped down.
“How could they not even notice we didn’t even have an auditor for the whole year or not have contacted the auditors to check on the audit and financials?”
Virgin Active spokesperson Carla White confirmed that Pratt was employed by Virgin Active but that she worked exclusively for the society.
“After the society completed an annual audit in 2015, they notified Virgin Active of the suspected fraud. Pratt was successfully prosecuted and sentenced.”
Darroch confirmed a motion of no confidence in the executive committee was received and was dealt with at a special general meeting, where it was rejected.
“It was agreed the executive would co-opt four further members onto the committee and all members, including the newly co-opted members, would stand down at the society’s next AGM.”
He said there was no failure to deal with the theft and no allegations of complicity, financial misconduct or wrongdoing against any members of the executive committee.
“Procedures in place at the time of the theft were those the exco inherited from previous excos.
“When the theft was uncovered Pratt was dismissed, the matter reported to the police and steps taken to prevent it from happening again, including appointing a chartered accountant as treasurer.”
Darroch said of the roughly R2m that was stolen, R1m belonged to the society, with R1m held by the society on Virgin Active’s behalf.
Roughly R550,000 of the money had been recovered through an insurance claim.
Darroch said that prior to Pratt’s dismissal in 2015, she presented a cash reconciliation document, prepared by herself, at every executive committee meeting.
“She was permitted to load and release payments below a certain level on the society’s behalf. Most of the cash held by the society at that time was held in an investment account.
“Pratt, who earned a certain level of trust from her 20 years’ service, gained access to the account by forging certain exco members’ signatures.”
The committee was not aware of any complaints, he added.
Pratt had hidden her crimes by forging an audit report from the society’s auditor, which the executive committee believed to be a genuine document.
“The auditor, having not heard from the society for some time, believed his mandate had been terminated, while the then treasurer was assured by Pratt that ... the audit would take place.”