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SARS 'rogue unit' lead auditor investigated

Oct 10 2017 21:30
Carin Smith

Cape Town - Former KPMG auditor Johan van der Walt, who was the lead partner on the so-called SA Revenue Service (SARS) "rogue unit" report, is being investigated by the Independent Regulatory Board of Auditors (IRBA).

The report, which was requested by SARS Commissioner Tom Moyane, suggested that former Finance Minister Pravin Gordhan - when he was SARS commissioner - "ought to have known of the existence of the unit". The report's authors found no evidence, however, that Gordhan had been informed of the existence of the unit.

A copy of the report made headlines when it was leaked to the press in early October 2015. 

Last month, following the conclusion of an internal investigation, KPMG withdrew the findings and conclusions of this report. 

"To be clear, the evidence in the documentation provided to KPMG South Africa does not support the interpretation that Mr Gordhan knew, or ought to have known, of the “rogue” nature of this unit," it said. 

Gordhan has since indicated that, following the KPMG retraction, he is seeking legal advice.

Investigation

The IRBA,a statutory body that oversees those parts of the accountancy profession involved with public accountancy, is currently investigating KPMG's role in allegations of state capture by the Gupta family.

Bernard Agulhas, CEO of the IRBA, told Fin24 on Tuesday that the IRBA "has issued the relevant registered auditor with a letter on Friday informing him that we will be investigating him".

Agulhas said in this kind of letter the IRBA usually requests an auditor to provide information which will be relevant to the investigation.

"In the current investigation, we will investigate the auditor’s conduct in delivering the professional service, inter alia, in terms of the IRBA code of professional conduct," said Agulhas.

"The IRBA sanctions, if an auditor is found guilty, include a caution or reprimand, suspension for a period, a maximum fine of R200 000 per charge or removal from the IRBA register."

Agulhas earlier said that IRBA does not have jurisdiction to investigate forensic reports per se, but that it would be able to probe the conduct of the auditor responsible for signing off on the report, provided the auditor is registered with IRBA.

Fin24 reported in July that the board of auditors was launching an investigation into KPMG's audits of Linkway Trading, a company allegedly at the centre of the Gupta wedding scandal.

In June, an amaBunghane and Scorpio investigation exposed what was called “an intricate web of money transfers and laundering” in 2013 through the Free State government, dairy firm Estina and a host of Gupta-linked companies, including Oakbay Investments and Linkway Trading.

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