The Blindspot in Investigative Findings: Lessons from South African Case Law

On a daily basis, South Africans are confronted with media reports detailing allegations of fraud, corruption, and unethical conduct in the affairs of organs of state. The responsibility to ensure that these allegations are properly investigated and that appropriate consequence management follows lies squarely with Accounting Officers and Accounting Authorities. In their haste to demonstrate action, these functionaries appoint investigators to "get to the bottom of the story", sometimes without consideration of the investigator's training, expertise, or ethical obligations.

While anyone with an enquiring mind may attempt an investigation, not everyone possesses the technical competence and ethical discipline to draft an impartial and legally defensible forensic report. An ill-prepared or procedurally flawed report can render an investigation futile, exposing the appointing authority to legal challenges and undermining the pursuit of accountability.

To ensure that investigations are effective, organs of state should engage investigators who are members of recognised professional bodies such as the Association of Certified Fraud Examiners (ACFE) and the Institute of Commercial Forensic Practitioners (ICFP). These bodies have codes of conduct and reporting standards that serve to protect the integrity of investigations.

The ACFE Code of Professional Conduct prohibits Certified Fraud Examiners (CFEs) from expressing opinions on the guilt or innocence of any party (Section V(B)(2)). 

The ICFP Reporting Standards similarly emphasise that forensic practitioners must:

• Restrict their reports to the scope defined in the terms of reference (Par 3.003);
• Reflect adherence to constitutional and legal requirements, including procedural fairness (Par 3.004);
• Avoid drawing conclusions on guilt or stating that a transgression has occurred (Guidance Note to Par 3.004).

Violations of these principles can result in legal challenges, as demonstrated in the following two cases.

Prudential Authority of the South African Reserve Bank v Msiza and Another [2023] ZAGPPHC 1410

This case concerned the high-profile “Great Bank Heist” report authored by Advocate Terry Motau SC. The report implicated Mr Mamphela Daniel Msiza in the VBS Mutual Bank scandal. Mr Msiza challenged certain adverse findings against him on the basis that he had not been afforded an opportunity to respond to the allegations.

The High Court initially ruled in Mr Msiza’s favour, setting aside the offending portions of the report. However, on appeal, the full bench of the High Court sitting in Pretoria reversed this decision.

Key Legal Issues:

1. Whether the investigator exercised public power that required procedural fairness;
2. Whether the absence of audi alteram partem rights invalidated the report.

Findings on Appeal:

The appeal court held as follows:

“[71]      In my view, the mere recordal of evidence of witnesses who implicated First Respondent as contained in paragraphs 72, 73, 80 and 90 of the report do not seriously prejudice First Respondent to the extent that the implicated person in the Masuku judgement was prejudiced.  In my view, should the reasonable person read those portions of the report, it will be appreciated that it is not a factual finding but a recordal of evidence. Considering the analysis of the nature of the impugned portions of the report as contained in paragraphs 72, 73, 81 and 90 of the report, I am of the view that it is not reviewable under the principle of legality for the reasons as aforesaid.

 [72]      Insofar as paragraph 80 of the report contains the recordal of a certain inference drawn by the Investigator, I hold a similar view. I am also of the view that a reasonable person who reads such expressed view by the Investigator will realise that it is not a factual finding or determination of culpability, but merely the expression of a prima facie view based on available information.   I also hold the view that such recordal does not cause the serious prejudice such as suffered by the implicated person in the Masuku judgement. I am therefore of the view that paragraph 80 of the report is also not reviewable under the principle of legality.

 [73]      However, insofar as it may be found that First Respondent is  prejudiced by the impugned portions of the report to the extent that the report is reviewable under the principle of legality, in my view the fact that the Investigator did not interview First Respondent and/or afforded the First Respondent an opportunity to “state his case” do not render the references to First Respondent in the report as irrational, with due regard to the means employed by the Investigator and the objectives of the Investigator for the following reasons:”

Legal Significance:

This decision underscores that not all investigative functions attract the strict requirements of procedural fairness. The determining factor is whether the investigation culminates in a decision with external legal effect. Because Motau's findings did not directly impose consequences or deprive Msiza of legal rights, the court found that no procedural unfairness had occurred.

Furthermore, the appeal court took into account that the nature of Adv. Motau SC’s mandate which stemmed from the Financial Sector Regulation Act, 9 of 2017 and afforded him broad discretion in how to gather evidence and reach conclusions for the internal benefit of the Prudential Authority. This aspect of legal authority and scope of discretion was central to the outcome.

Maru and Others v MEC for Transport and Community Safety Eastern Cape and Others [2025] ZAECBHC 9

In Maru, the applicants were employees of the Eastern Cape Department of Transport’s Scholar Transport Unit. They were investigated by a departmental functionary, Mr Tshaka, for alleged misconduct including the manipulation of allocation letters and collusion with service providers. The investigator was tasked with engaging relevant parties and making findings to assist the Department in taking remedial action.

However, the applicants argued that they were not afforded sufficient opportunity to respond to serious findings that had already been made, and that they were denied access to material documents.

Key Legal Issues:

1. Whether the investigation adhered to principles of procedural fairness;
2. Whether the findings had a direct legal impact on the applicants, thus attracting judicial review.

Findings:

The Eastern Cape High Court found that the report did indeed contain conclusive findings of misconduct and that the investigator acted beyond the scope of his mandate by issuing such findings without affording the employees proper audi.

The Court held as follows:

“[21] On a proper reading of the Report, adverse findings of culpability on the part of the Applicants were made. The findings are conclusive in relation to contended for misconduct by the Applicants. Factual findings are made and legal conclusions drawn. Indicative of this are words and/ or phrases used in the Report such as ‘irregularly or fraudulently’, ‘complicit or accessories in the perpetration of the fraudulent transactions’, and ‘Ms Sonjani and Maru acted irregularly, without authorisation and probably in cahoots with the operator’.”

The court ultimately held that the report should be set aside.

Key Lessons for Investigators and Decision-Makers

1. Know the Source of the Mandate: Whether an investigation stems from legislation, internal policy, or ad hoc appointment has a direct bearing on the methodology followed by the investigator in fulfilling the mandate. Adv. Motau SC’s mandate under statute gave him investigative discretion, whereas Mr Tshaka’s departmental instruction required procedural engagement with affected parties.
2. Understand the Purpose of Your Report: If the report is intended to inform decisions that affect legal rights, it may be susceptible to judicial review.
3. Stay Within the Mandate: Investigators must limit themselves to fact-finding and refrain from making definitive findings of guilt or misconduct unless specifically empowered to do so.
4. Respect Procedural Fairness: A meaningful opportunity to be heard is not a tick-box exercise. Adequate time, relevant information, and a neutral process are critical.
5. Avoid Legal Conclusions on Culpability: Use of accusatory language and premature conclusions not only exceeds mandate but also undermines the report’s credibility and legality. The language used in formulating findings is key is steering clear of this pitfall.

Conclusion

The Msiza and Maru cases underscore that the legitimacy of investigative findings rests as much on process as it does on substance. The rule of law demands that even the most urgent investigations be conducted fairly, within scope, and without prejudgment. Investigators must be clear on their powers and limits, and those who commission investigations must ensure that appointments are accompanied by clear, lawful mandates. Justice pursued without fairness risks becoming injustice in disguise.