The SJN had been looking into alleged discrimination and racism within the national team and the CSA since the re-admission of post-apartheid South Africa to international cricket in 1991.

In a series of hearings between July and October this year, a number of black players testified that they had been victims of racism and discrimination while part of the national team.

Boucher has admitted playing a part in joining his team-mates in singing songs and using nicknames that caused offence, and has since apologised.

The ombudsman report, submitted to CSA earlier this month, also criticised Smith and another former skipper, AB de Villiers, for selection decisions made during their captaincies, which it said were prejudicial towards black players.

Smith and de Villiers have denied the allegation.

CSA said it instituted the formal inquiry in an effort to treat the allegations "with the utmost seriousness and in a manner that ensures fairness and due process in terms in South Africa's labour legislation and the Constitution".

"CSA respects the SJN process and we are engaging with the report in detail and holistically," CSA's board chairperson, Lawson Naidoo, said in a statement.

"We have taken careful cognisance of the recommendation of the Ombudsman, that in appropriate cases, a further process should be instituted to test the evidence and submissions made.

"We have decided this is indeed the appropriate route to follow. We hope this will give implicated parties a fair opportunity to be heard so that finality can be achieved, and any final findings can then be acted on."

'Racial bias'

Smith will continue as director of cricket with Cricket South Africa while allegations against him are investigated

The inquiry is due to take place early in the new year, after the completion of the tour by India on 23 January. The tourists are currently in the country for three Tests and three one-day internationals.

Former left-arm spinner Paul Adams told the commission that a racial slur about him was used in a team song in the late 1990s.

Former wicketkeeper Boucher, who played 147 Tests and 295 ODIs between 1997 and 2012, subsequently apologised in a written submission to the commission.

However, the ombudsman found that Boucher's explanation lacked sensitivity and understanding of South Africa's racist history.

In his findings, the ombudsman said Smith, in refusing to answer to CSA's former CEO Thabang Moroe, "evinces his racial bias against black leadership at CSA".

Moroe was dismissed in August after a forensic audit revealed that he had "committed acts of serious misconduct".

Through his lawyer, Smith dismissed the finding, highlighting the fact that he was working well with under current acting CEO Pholetsi Moseki and other black officials in the organisation as proof that his conduct is not, and was not, racist.

Smith was also accused in the report of having blocked keeper Thami Tsolekile's elevation to the South Africa team after Boucher's career was prematurely ended by an eye injury in July 2012.

Despite not being a specialist keeper, De Villiers took up the position in the Test series against England ahead of Tsolekile, who was the reserve keeper in the touring squad.