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It depends on whether or not the the person is an independent reviewer or auditor.
In the case of auditor, trading in insolvent circumstances is not a defined reportable irregularity in terms of section 1 of the Auditing Professions Act.
In the case of an independent review, the requirements are (oddly) more onerous. Regulation 29(1)(b) of the Act defines an RI as "any act or omission committed by any person responsible for the management of a company, which-
(i) unlawfully has caused or is likely to cause material financial loss to the company or to any member, shareholder, creditor or investor of the company in respect of his, her or its dealings with that entity; or
(ii) is fraudulent or amounts to theft; or
(iii) causes or has caused the company to trade under insolvent circumstances.
SAICA is of the opinion that until CIPC issue a practice note to explain what is meant by insolvent circumstances, Independent Reviewers are advised report any insolvency (commercial and factual insolvency) to CIPC as a RI in order to comply with the regulations.
Note that it is as such not a requirement that the company or cc make such a submission, but a require that the accounting officer (for cc's) or independent reviewer do so.
SAICA is of the opinion that until CIPC issue a practice note to explain what is meant by insolvent circumstances, Independent Reviewers are advised report any insolvency (commercial and factual insolvency) to CIPC as a RI in order to comply with the regulations.
Would that include situations where the deficit is adequately covered by a subordinated loan?
If it is not commercially insolvent, I would say no. (That's only an opinion.)
If it is both factually and commercially insolvent, then yes. If the loans are already subordinated, then that is mentioned in the report. If not, then it is mentioned in the follow up report that is required 20 days after the initial report.
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