THE probe into Corpcapital, commissioned by Trade and Industry Minister Alec Erwin, will scrutinise whether Nigel Payne's earlier investigation was indeed a "whitewash" as claimed by former director Nic Frangos.

Erwin has mandated advocate John Myburgh and University of Port Elizabeth accounting professor Keith Prinsloo to conduct the probe only the sixth such inquiry launched by government.

This comes just six months after an investigation, led by Payne, cleared the company of Frangos's charges of corporate governance breaches.

The Payne probe was commissioned by Corpcapital, and Erwin's inquiry will cover much of the same ground. Corpcapital director Neil Lazarus said Payne's report would come under scrutiny.

"Investigators will be asked to take a view on the integrity of the Payne report. But we welcome this investigation to put these matters to rest."

Lazarus said Corpcapital was alerted to the probe only last Thursday, four days after controversial CEO Jeff Liebesman quit with little explanation.

On Friday, the department disclosed the terms of the inquiry, which will run for four months under section 258 of the Companies Act. It will probe :

The manner in which Corpcapital valued its Cytech subsidiary, and whether its value was inflated to boost profit artificially and possibly fraudulently;

Possible conflicts of interest that might have existed in the merger process in 2001 that created Corpcapital;

Possible inadequate disclosure to shareholders and the adoption of inappropriate accounting policies; and

Whether the financial statements comply with general accepted accounting practices.

These inspections are usually internal, and there is no clarity yet on whether Erwin will release the findings.

Rob Rose Business , Day 1st Edition