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Three clients in two days: KPMG exodus continues as Sibanye joins pack

May 04 2018 16:24
Khulekani Magubane and Tehillah Niselow

Cape Town – KPMG capped off a bad week by losing three clients in two days, when Sibanye Stillwater [JSE:SGL] also announced that it would no longer be using the firm’s services as an independent external auditor.

Sibanye said a notice for its annual general meeting proposed that the board re-appoint KPMG for its auditing effective until the 2019 annual general meeting.

On Thursday, Barclays Africa Group [JSE:BGA] announced that ABSA would no longer be working with KPMG. Nedbank [JSE:NED] however said it would stay the course with the firm pending the outcome of ongoing investigations into their conduct.

Earlier on Friday, Redefine Properties [JSE:RDF] has joined a growing list of companies and institutions to cut its business with auditing firm KPMG short, as it announced that it would renege on its annual general meeting proposal to re-appoint KPMG as its independent external auditor.

The latest bout of tie-cutting follows the Auditor General's announcement on April 17 that it would no longer be using the firm to audit the public sector.

On Friday, Auditor General Kimi Makwetu told Fin24 whether KPMG will ever be allowed to do business with the office of the AG will depend largely on the outcome of investigations into the private auditing firm and whether its leaders can eradicate poor adherence to auditing disciplines.

Earlier Makwetu informed Parliament’s Standing Committee on the Auditor General that uncertainty of independent leadership at Nkonki Inc and the contagious effect of eroded trust in KPMG drove his office to cut ties with the two auditing firms.

Meanwhile, James Wellstead, head of investor relations at Sibanye Stillwater, said that the company reviewed its relationship with KPMG after the VBS scandal and the audit firm’s loss of government business.

He said they realised there was “some risk” involved having KPMG as their auditor.

“We have now taken a view that we will put it out to tender,” Wellstead said.

KPMG will continue auditing the gold and platinum giant for their 2018 financial year which ends in December, he said.

“Following the ongoing and more recent VSB Bank developments, the Sibanye-Stillwater Board wishes to advise shareholders that a process of selecting a new independent external audit firm for the Group, with respect to the financial year ending 31 December 2019, will commence following the AGM on 30 May 2018,” said Sibanye in its statement.

KMPG spokesperson Nqubeko Sibiya said: "We are disappointed by, but respect, their decision. We are proud of our association with them and of the excellent work our team did for them."



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