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Save SA calls on corporate SA to cut ties with KPMG

Sep 11 2017 18:41
Jan Cronje, News24, Liesl Peyper, News24

People speaking at Save South Africa's 'real State of the Nation Address' say citizens are fed up with the state of the country under the current administration. (Paul Herman, News24)

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Update, Sept. 11, 2017, at 7:39 p.m.: This article has been updated to reflect KPMG's response. 

Cape Town - The Save South Africa campaign on Monday called on corporate South Africa to “urgently review business relations with KPMG”.

The advocacy group said it put out the call “in light of ongoing revelations about the audit firm’s central role in facilitating state capture”. 

It called on South African firms to “cancel their contracts where possible” with the auditor, adding "KPMG could be the next Bell Pottinger". 

In response to a request for comment, KPMG spokesperson Nqubeko Sibiya said: "KPMG International is currently leading all aspects of the comprehensive review in relation to KPMG SA’s work with the Gupta Group, and the review is nearing conclusion. KPMGI and the KPMG SA Board will accept and act on the findings of the review.

Should any wrong-doing be found, we are committed to driving absolute accountability and all required actions will be implemented," he said. 

In a previous media statement on August 11, KPMG South Africa’s chief executive Trevor Hoole had acknowledged that the auditor should have cut its ties with the Gupta family earlier. 

“It is now clear that based on publicly-available information, KPMG should have resigned earlier than March 2016 and should have stopped working for the Gupta companies sooner than we did,” he said. 

But he reiterated that an internal review had not found any evidence that KPMG “in any way supported or condoned alleged tax evasion or money laundering”.

In its statement on Monday, Save South Africa said KPMG had provided services to the Gupta family and at least 36 linked companies, adding it was “clearly embedded in the state capture process”. 

“During this period, several KPMG staff members were wined and dined by the family, including 2010 World Cup match tickets and invitations to the launch of The New Age and Diwali celebrations,” it said. 

'Unacceptable level of familiarity' 

“It's clear from the Gupta emails that there was a totally unprofessional and unacceptable level of familiarity between KPMG staff and the people they were supposed to be auditing, not to mention conflicts of interest”.  

The campaign’s call to cut ties with the firm comes a week after KPMG suffered another blow to its reputation, when the Institute of Directors announced it was temporarily suspending all co-branded activities with the auditing firm.

This followed a #GuptaLeaks expose in June, that revealed how the Free State provincial government had largely picked up the tab for a lavish Gupta family wedding at Sun City. KPMG was allegedly involved in siphoning taxpayer money to pay for the affair.

KPMG International, meanwhile, is conducting a comprehensive review of the South African auditor. 

This is expected to be completed by the end of September. 

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kpmg  |  save south africa  |  gupta emails  |  sa economy
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