Chartered accountant Victor Sekese’s story is an epic journey across the great divide that black chartered accountants have had to bridge in the world of finance, where both race and size signalled “Keep Out”.
Sekese is CEO of SizweNtsalubaGobodo, the fifth-largest accounting firm in Southern Africa, and a board member of the South African Institute of Chartered Accounts (SAICA).
“Do not write yourself off. I grew up in the township and I went through the Bantu Education system. I was not equipped to deal with the analytic nature of accounting, but I did, and so can you if you are committed. Commitment is essential to overcoming these barriers.”
This is Victor Sekese’s message to students from schools that are still not providing an adequate education and where good maths and science teachers are in short supply. Without in any way excusing the inexcusable state of basic education in South Africa, he motivates young would-be accountants to take charge of their lives.
Raised in Mamelodi township east of Pretoria, Sekese is acutely aware of the commitment required to get where he is, particularly since he became a chartered accountant or CA in the pre-1994 era, when racism was still so entrenched that companies were reluctant to entrust black accountants with their books.
“They were never blatant about it, but when I did my articles the quality of work that my white peers were given compared to what I was given was extremely telling. I felt I didn’t deserve to be treated like this and it motivated me to excel and make a way for myself,” says Sekese, who passed his board exams in 1991 during the second year of his articles.
To reach this point Sekese travelled a long road, including submitting many applications for scholarships and bursaries to study at Wits. He succeeded in securing a bursary from Tongaat Hulett, with the proviso that he worked for the sugar company once he had graduated.
“That’s what got me to Wits and I studied for a BCom, majoring in accountancy, and working really hard. It paid off and I progressed well while many others in my class from a variety of backgrounds were battling,” continues Sekese. Together with a handful of other students, he started an accountancy clinic on campus in 1988, to help those from disadvantaged backgrounds to better handle their studies.
Apart from working hard, Sekese had a natural talent for accountancy, and his interest in becoming a CA was kindled. This required re-negotiating his bursary terms with Tongaat Hulett and the company agreed.
During this time he became active in the Association for the Advancement of Black Accountants of Southern Africa (ABASA), which was established in 1985.
“There were very few black CAs in South Africa when I was doing my articles in the early 1990s and ABASA members were committed to changing this. We arranged bursaries, held conferences and included student chapters,” says Sekese. He also lectured and tutored Unisa students in the evenings and on weekends on a voluntary basis through an educational NGO called Sached. And he lectured at Vista University campus in Soweto on a part-time basis. Vista was established in 1981 by the apartheid government to ensure that urban black South Africans seeking tertiary education would be accommodated within the townships rather than at the “white” campuses.
On completion of his articles in 1992, he was due to work in his bursary time for Tongaat Hulett, when BMW SA offered him a job as divisional financial manager. The motor company managed to convince Tongaat Hulett to accept financial compensation for Sekese’s bursary.
“I worked at BMW for a year but the corporate environment didn’t suit me. I missed the excitement and daily challenge of the audit profession,” he explains. “I had to do something about it because I firmly believe that your work needs to give you enjoyment and fulfillment.”
BMW agreed to let him pay back his bursary money in installments and, at the beginning of 1994, that landmark year for South Africa, he joined Ntsaluba Inc – the first black accounting firm in Johannesburg.
“I’d worked closely at ABASA with Sango Ntsaluba, who was the principal of the firm. He became a role model for me and helped me a lot.”
Ntsaluba Inc’s offices were in Main Street in downtown Johannesburg and its client profile included NGOs funded by foreign donors and black professionals, notably doctors and lawyers, whom it helped with their books and tax matters.
After 1994, however, the foreign donors started closing the taps on many NGOs; their rationale was that the fight for democracy had been won. “As we all know, it was far from it, but it forced us to rethink our strategy as a firm because we were losing a significant percentage of our client base. At the same time the market was not yet opening doors for us.”
Teaming up with other members of ABASA’s Practitioners Forum, they created an audit company called APF Inc in early 1995. After lobbying various stakeholders for work, including the Office of the Auditor General, government and state-owned companies, they were offered an opportunity by Transnet, which presented the biggest audit in the state-owned company space. APF Inc was appointed joint auditors to Transnet with Ernst & Young, one of South Africa’s “Big Four” audit firms. The other members of the Big Four are Deloitte, KPMG and PwC.
“It was a defining moment for us and a major victory for black auditors as it was the first time we had secured an assignment of this magnitude and complexity; one that could prove our intellectual capability,” recalls Sekese. “There were a lot of sceptics and we had to go the extra mile to ensure we succeeded, which we did, surprising everyone.”
This signalled the start of significant transformation in the profession, and APF Inc evolved to become a national company SizweNtsaluba VSP in late 1995. “Sizwe Nxasana, currently the CEO of FirstRand, was our first CEO and, as a medium-size firm, we secured top clients, including MTN, Stanlib and the South African Reserve Bank,” says Sekese, who succeeded Nxasana in 2006.
But just when it looked like the tide had turned for them in the new democracy, the market changed with the emergence of the broad-based black economic empowerment scorecard. “It should have worked in our favour; instead, a disturbing trend emerged where the largest firms started showing favourable scorecards on paper. They would then be granted major audits and they would subcontract us. We were regressing from being a firm in our own right and we needed to address this.”
Which they did, by sitting down with another medium-size black-owned firm, Gobodo, and merging in June 2011 to become SizweNtsalubaGobodo – the fifth largest accounting firm in Southern Africa.
As a member of what is now the “Big Five” the firm offers auditing, management-, IT- and taxation consulting and forensic auditing. It also offers actuarial services, introduced in January 2013, and is sole auditor of Denel and Transnet, the latter over a period of five years at a value of more than R60-million annually.
“We have been awarded these audits not because we are a black firm but because we have capacity and experience, we are agile, we are excellent at what we do and we are quick to respond to new challenges,” says Sekese. The Transnet account, for example, was a baptism of fire. Transnet, he explains, needed to raise US$1-billion for its expansion programme and his firm had to sign off the audit earlier this year. “We claim our share in the success of this because international investors usually want to see the Big Four signatures and they saw our signature and were still prepared to offer not just $1-billion but $8-billion.”
Since the merger the 1 000 staff members (80% black) of SizweNtsalubaGobodo have been working hard to grow their presence in all of South Africa’s nine provinces, as well as in Namibia, Lesotho, Swaziland, Tanzania, Ghana and Nigeria. Approximately 80% of the staff members are black.
The number of black CAs in South Africa has grown over the years to over 6 000 today. “This is still not nearly representative of the 36 000 CAs in the country but we have come a long way, and, together with the SAICA, the profession is doing a lot to improve this,” says Sekese. He has also continued his work with ABASA and is the past President of this association.
Numerous black students over the past 27 years have benefited through the ABASA Bursary Fund while the establishment of ABASA’s Nkuhlu Subvention Fund works to ensure that the historically disadvantaged universities secure quality lecturers to facilitate SAICA accreditation. In 2009 the University of Fort Hare received full accreditation from SAICA as a result of this initiative.
“I am happy to say that the atmosphere in the market has also changed, and our accountants are entrusted with top accounts.”
So where to from here?
“We are working on our Africa strategy – extending our footprint across the continent and acquiring other firms to increase our capacity. Put it this way, our 2011 merger was just the beginning,” says Sekese.
Labels: Victor Sekese Sizwe Ntsaluba Gobodo