Publications
Partners
Johannesburg - Barclays Africa is reviewing its relationship with KPMG as the auditing firm comes under scrutiny for work on behalf of South African companies linked to the politically connected Gupta family.
The nation’s largest lenders, including Barclays Africa’s ABSA unit, last year closed bank accounts of businesses tied to the family, who are friends with President Jacob Zuma and in business with one of his sons.
Former Public Protector Thuli Madonsela alleged in November that Zuma let the Guptas influence cabinet appointments and the award of state contracts, which they deny. KPMG allowed Gupta businesses to divert public money to pay for a family wedding, according to the Johannesburg-based amaBhungane Centre for Investigative Journalism.
Absa met with KPMG, KPMG International and the company’s lawyers and was given preliminary feedback on some aspects of the auditing firm’s internal investigation into its Gupta work, the Johannesburg-based bank said in an emailed response to questions on Thursday. KPMG told Absa that it will provide more details when it presents the findings of its probe by the end of September, Barclays Africa said.
“After carefully considering the further information requested and the findings, Absa will be in a position to make a decision as to whether to continue to engage KPMG as its external auditors,” the lender said.
Getting fired
Save South Africa, which includes civil-society groups and business leaders, has called on local companies to drop KPMG as an auditor because of the work it did for 36 entities tied to the Guptas since at least 2008. A review by KPMG hasn’t found any evidence of dishonesty on the part of the suspended partners, the company said last month. KPMG spokesperson Nqubeko Sibiya didn’t immediately answer emailed questions.
The Institute of Directors in Southern Africa has suspended co-branded activities with KPMG, including sponsorship of its golf day, while Cape Town-based Sygnia Asset Management fired the audit firm. Other clients of KPMG’s include Old Mutual, Africa’s biggest insurer, and Standard Bank Group, Africa’s biggest bank by assets. Sibanye Gold has said it will wait for KPMG to complete its investigation before making a decision.
“We have continued our engagement with KPMG at the highest level on this matter,” London-based Old Mutual said on Thursday. Nedbank Group, the insurer’s lending unit, continues to monitor any service providers implicated in dealings surrounding the Guptas and will terminate relationships with them if needed and after a “robust internal process,” chief executive officer Mike Brown said in an email.
Standard Bank “is committed to doing business ethically and in accordance with all applicable laws and expects all of its counter-parties to be similarly committed,” Africa’s largest lender said in an emailed response to questions. “We exit relationships where that commitment is lacking.”
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
