KPMG a ‘willing participant’ – Gordhan

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KPMG a ‘willing participant’ – Gordhan

KPMG SA was a ‘willing participant in state capture’ and its leadership hasn’t fully grasped the magnitude of what they were involved in, former Finance Minister Pravin Gordhan told Eusebius McKaiser on CapeTalk radio yesterday. According to a Fin24 report, he said KPMG SA’s years-long auditing of multiple Gupta-owned companies had to be understood in the context of state capture, and could not be represented as a merely ‘technical matter’. ‘In fact, they (KPMG SA) were willing partners so to speak. Maybe they didn’t realise the magnitude of what they were doing, but, for a fee, they were willing partners in a state capture project, as were many others,’ he said. Gordhan said that KMPG SA’s leadership, which was cleared out on Friday 15 September, had been ‘ducking and diving’ for too long about the work they had done for Gupta-owned companies. Asked by McKaiser what effect KPMG’s auditing of Gupta-owned companies has had on the SA economy, Gordhan said it was ‘huge’. ‘Ultimately you can say that in relation to the audits they performed for the companies – and that varies from seven years to 15 years – that any short-sightedness of oversight, or refusal to cut through the fog to understand what was actually going on – is the direct cause of allowing hundreds of billions of rands to leave SA.’ Gordhan added that ‘for now (KPMG) has to bear the responsibility of the billions we have lost’.

Full Fin24 report

Auditing firm SizweNtsalubaGobodo (SNG) is the latest to cut ties with Gupta-owned businesses, according to a Fin24 report. In a media statement yesterday SNG, the fifth largest accounting firm in southern Africa, said its board had taken a decision to resign as the auditors of Oakbay Resources and Energy Limited and its related entities. SNG took over as Oakbay’s auditors in April 2016, the month after KPMG SA resigned. They are also the auditors for state power utility Eskom. ‘The board took this decision after a thorough assessment of its relationship with the company which has spanned a period of 18 months. This decision has been communicated to Oakbay,’ read the statement. SNG said that its board was ‘satisfied that SNG have carried out their responsibilities in accordance with the Audit Professions Act’. The statement did not give any specific reasons for dropping the Oakbay contract, apart from one sentence saying it had to do with new developments. KPMG has been removed as a strategic partner of Business Ethics Network Africa (BEN-Africa), an NGO encouraging ethical business on the continent, says a report in The Times. BEN-Africa’s ethics conference planned for this year has been cancelled because KPMG would have sponsored it, the NGO’s head Liezl Groenewald said. Groenewald said the disgraced auditing firm’s logo and strategic partnership status were removed from BEN-Africa at the weekend. Despite the scandal, KPMG has kept its whistle-blower hotline accreditation by The Ethics Institute – an NGO that encourages ethical business leadership and accredits whistle-blower hotlines to ensure they are independent and safe to use. Deon Rossouw, chief executive of Ethics Institute, said they would keep KPMG’s accreditation, granted in August, as it meets technical standards. The hotline is provided to KPMG clients so employees can anonymously report internal corruption. It is not used internally at KPMG.

Full Fin24 report

Full report in The Times (subscription needed)

KPMG should make full and frank disclosure about its past conduct and institute credible initiatives to make right the harm that was caused to numerous individuals‚ public institutions‚ the country and the economy. This is the view of four former SARS officials – Ivan Pillay‚ Peter Richer‚ Yolisa Pikie and Adrian Lackay – who want the so-called ‘rogue unit’ report withdrawn in full. The four‚ in response to a request from KPMG‚ met the leadership of KMPG SA‚ led by its new CEO Nhlamu Dlomu‚ and with members of KPMG International, notes a TimesLIVE report. The four said the meeting was without prejudice and they reserved their legal rights as parties who were adversely affected by the work of KMPG. ‘Today’s was a preliminary‚ first meeting. We appreciate the efforts by KPMG to finally afford those affected by the ‘forensic’ investigative report to SARS‚ the opportunity to be heard.’ Two weeks ago‚ KPMG withdrew all of its findings‚ recommendations and conclusions around its report into the SARS ‘rogue spy unit’. The four former officials said they remained convinced that KPMG’s conduct had caused immense harm to a number of experienced individuals‚ their reputations and careers as public servants‚ and it damaged institutions like SARS. ‘We believe KPMG should make full and frank disclosure about their past conduct and institute credible initiatives to make right the harm that was caused to numerous individuals‚ to public institutions‚ to our country and the economy‚’ they said in a statement. They said in their view‚ the ‘findings’ of the KPMG ‘forensic report’ to SARS‚ became the basis for the aborted criminal prosecution of (former Finance Minister Pravin) Gordhan‚ former SARS Deputy Commissioner Pillay and others during October 2016.

Full TimesLIVE report

Statement

See more at Legalbrief

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