Who will audit the auditors who audit the auditors?

South Africa faces an age old problem with regulation;

South Africa's financial services regulator is carrying out an internal audit in response to allegations that its former chief financial officer extorted money from a local business by threatening to scrutinise its books.

The Financial Services Board (FSB) said Dawood Seedat, who was its CFO for more than eight years, stepped down shortly after local media reported the allegations two weeks ago.

Media reports said Africa Cash & Carry had paid Seedat 12 million rand ($1.12 million) so that he would not shut the firm down through audits by the FSB and the Revenue Service.

The wholesaler paid in different tranches and the final instalment of 2 million rand was secretly filmed, the reports said.

Gives new meaning to regulatory capture.