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KPMG replacement also drops Guptas

Sep 26 2017 18:40
Jan Cronje

Cape Town - Auditing firm SizweNtsalubaGobodo (SNG) is the latest SA company to cut ties with Gupta-owned businesses. 

In a media statement on Tuesday SNG, the fifth largest accounting firm in southern Africa, said its board had taken a decision to resign as the auditors of Oakbay Resources and Energy Limited and its related entities. 

SNG took over as Oakbay’s auditors in April 2016, the month after KPMG SA resigned. They are also the auditors for state power utility Eskom. 

“The board took this decision after a thorough assessment of its relationship with the company which has spanned a period of 18 months. This decision has been communicated to Oakbay,” read the statement. 

High professional standard

SNG said that its board was “satisfied that SNG have carried out their responsibilities in accordance with the Audit Professions Act”. 

“Further, SNG are committed to continue upholding its high professional standards as regulated by the Independent Regulatory Board of Auditors.  SNG are precluded in terms of their professional obligations of confidentiality from discussing the affairs of clients on public platforms,” it said. 

The statement did not give any specific reasons for dropping the Okaybay contract, apart from one sentence saying it had to do with new developments. 

SNG noted that, when it took over the contract from KPMG in April 2016 it contacted "the outgoing auditor in order to establish whether there were any professional reasons why it would not be appropriate to accept the engagement".

KMPG SA has been strongly criticised for its years-long role in auditing Gupta-owned companies, and has lost clients. Former Finance Minister Pravin Gordhan described KPMG SA as a “willing participant in state capture” in conversation with radio host Eusebius McKaiser on CapeTalk on Tuesday morning. 

Unless the Gupta-related companies appoint new auditors quickly, they face the prospect of functioning without both auditors and banking services from next month. 

This after 20 companies controlled by the family lost a court bid last week to stop the Indian-based Bank of Baroda from shutting their accounts.

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