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Patrice Motsepe's ARM drops KPMG

Oct 23 2017 13:53
Matthew le Cordeur

Cape Town – African Rainbow Minerals (ARM) has dropped KPMG as its internal auditors, it announced on Monday.

ARM, whose chairperson is Patrice Motsepe, said it “noted with concern the questions raised about KPMG’s governance and ethics compliance, as well as allegations regarding the lawfulness of KPMG’s conduct”.

"The ethics, governance and quality of the South African auditing firms have been globally respected for many years.

"It is extremely important that the behaviour and conduct of our auditing firms continues to justify the respect, trust and confidence that they have earned.

"After careful consideration, ARM has decided to terminate its relationship with KPMG."

ARM is among many South African firms that have cut ties with KPMG.

These include The Foschini Group, consumer goods distributor AVI, Munich Re of Africa, Sasfin, Hulisani and Sygnia Asset Management.

Business Leadership SA has also suspended the membership of the auditing firm, while Wits University has said it will not be renewing its contracts with KPMG when they lapse at the end of the year.

This follows a report by KPMG International made public in mid-September, which criticised the firm’s dealing with Guptas, as well as its work on the SARS 'rogue unit' report. 

Sticking it out 

Speaking to Fin24 earlier this month, the auditor's new SA CEO Nhlamu Dlomu said a majority of the firm's clients were sticking with KPMG.

Dlomu was promoted to the position of CEO after KPMG SA's top executive leadership was cleared out in mid-September. 

“It takes a lot of time to build the relationship [with a client],” she said. “Each and every client of ours matters to us.”

Dlomu said KPMG SA had not identified job cuts as a result of loosing clients. The auditor was focusing on retaining clients at the moment, rather than the clients it had lost. “If we are to retain jobs, we must retain our clients,” she said.

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