Staff of Gupta-linked auditor Nkonki fight closure | Fin24

Staff of Gupta-linked auditor Nkonki fight closure

May 16 2018 17:35
Paul Burkhardt, Bloomberg

Employees at SA audit firm Nkonki applied to a Pretoria court to block the company’s liquidation and have it put into administration instead so that there is a chance the business can be rescued, according to a court filing.

The auditing profession is under pressure in SA, with Nkonki and the local unit of KPMG losing clients after being linked to the politically connected Gupta family.

Deloitte & Touche is also under scrutiny for having audited scandal-ridden SA retailer Steinhoff International Holdings.

Last month SA’s Auditor General ended its contract with Nkonki following reports that a management buyout, led by the firm’s former CEO Mitesh Patel, was funded by an associate of the Gupta family.

The group of 102 employees said in the court papers that they hadn’t understood the liquidation process when it was proposed at an urgent company meeting on April 23.

Employees were advised to nominate a liquidator that same day, according to the documents. The staff have now asked that the court set aside the liquidator’s appointment and allow the firm to go into business rescue, SA’s equivalent of bankruptcy protection.

“The business rescue process would be a sensible approach to save our employment and to save the company,” Nkululeko Khaba, a representative for the Nkonki staff, said in the papers. The court was also asked to scrutinise managements’ possible motives for choosing voluntary liquidation, according to the documents.

Nkonki CEO Patel resigned in April following reports by investigative journalism unit amaBhungane that Gupta associate Salim Essa had funded his management buyout.

The Guptas, who are associates of former president Jacob Zuma, have been accused of using their political connections to win state contracts and influence government appointments. Zuma and the Guptas deny wrongdoing.

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