Securities Commission hands six Luanda Leaks audit cases to police

The chairman of the Securities Market Commission (CMVM), Gabriela Figueiredo Dias, said on Friday that the entity had made six communications to the Judicial Police (PJ) as part of the Luanda Leaks case, involving businesswoman Isabel dos Santos.

“There have already been six communications to the PJ Financial Investigation Unit, which does not mean that there will not be others,” Figueiredo Dias said.

She added that there were nine auditors analysed in 27 audited entities, and 12 cases were sent for misdemeanour assessment in relation to one auditor, with “two more under analysis” in relation to other auditors. “The main failures detected so far have to do with professional scepticism, duties of examination, duty to report to regulatory or other entities in case of suspicions of operations that may be related to money laundering or other criminal activities, documentation of the exercise of the duty to identify related parties,” she listed.

She also added “the evidence obtained regarding issues such as revenue or revenue recognition, economic substance of transactions involving related parties, and disclosure of balances of transactions with related parties”.

As a result of these actions, “a list of suspicious transactions that should be considered by auditors in the course of their work has been published”, “the auditors have been made aware of these issues through training given by the Portuguese Institute of Chartered Accountants on money laundering and terrorist financing”, as well as “concrete recommendations to the targeted auditors” and possible fines are being imposed.

As a consequence, the CMVM’s action may have an impact “on the very honesty and maintenance of the auditors’ record”.

On September 30 2020, the CMVM had already announced that it had instituted 10 supervisory proceedings against nine auditors following news published by the ‘Luanda Leaks’, involving alleged financial schemes of businesswoman Isabel dos Santos.

Among the highlights in the supervision of auditors in the 2019/2020 cycle, published at the time by the CMVM, was “supervision over nine auditors (10 supervisory proceedings), involving 27 audited entities and 84 audit files, following news published in the media about the so-called ‘Luanda Leaks’ case.

According to the document, the supervision of the 27 entities “was aimed at assessing whether the auditors had fulfilled all their duties,” in terms of “preventing and combating money laundering and terrorist financing,” and “compliance of the work carried out with professional standards and applicable legal and regulatory provisions regarding balances and transactions with related parties.

On 19 January 2020 the International Investigative Journalism Consortium revealed over 715,000 files, under the name of ‘Luanda Leaks’, detailing alleged financial schemes of Isabel dos Santos and her husband that had allowed them to withdraw money from the Angolan public purse via tax-havens.