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Concerns of a major conflict of interest have been raised against KPMG after it was discovered that an attorney who was deeply involved in the rogue unit allegations against the SA Revenue Service (SARS) was contractually employed by one of the embattled auditing firm's senior managers in the forensic unit.
This is the same unit which produced the report on the so-called SARS rogue unit.
News24 has learnt that Belinda Walter, the attorney who laid the original complaint against then SARS group executive Johann van Loggerenberg after a short relationship, several years ago, was a service provider for senior KPMG manager Allen Few.
This, SARS has admitted, was never disclosed to them when KPMG was appointed by SARS commissioner Tom Moyane in 2014 to investigate allegations that the revenue service had a "rogue unit".
Few, in his capacity as a manager at KPMG, was appointed as curator bonis by the Asset Forfeiture Unit in a preservation order against tobacco dealer Hennie Delport's business Phoebus Apollo Aviation in 2007.
News24 has learnt that Few briefed Walter as far back as 2008, while she was a candidate attorney at law firm Steyn Kinnear Inc. Her brief on the Delport case continued when she became a qualified and admitted attorney and started her own firm, and continued until as late as 2014.
Walter worked mainly in the tobacco industry. By her own admission, in an unsigned affidavit from April 2015 which was later made public through a serious of leaks on the tobacco industry called espionageSA, she was allegedly a spy who worked for both British American Tobacco and the State Security Agency while also working as the chairperson of the Fair-trade Independent Tobacco Association.
In a subsequent complaint to the Press Ombudsman around the affidavit, she denied the veracity of the leaked document.
When asked by the SA Press Association in 2014 about the spy claims, following a report by the City Press she said: "I don't want to comment and I will be issuing a summons against City Press".
News24 has seen proof that cheques for the work Walter did were requisitioned by Few and approved by directors within KPMG’s management.
Before the appointment of KPMG SA Forensic in December 2014 to SARS, two panels, the Kanyane and the Sikhakhane panels, had been appointed by former SARS deputy commissioner Ivan Pillay and then Minister of Finance Nhlanhla Nene respectively to investigate allegations against Van Loggerenberg that he disclosed confidential tax information to Walter.
Moyane later extended the mandate of the Sikhakhane panel to also include allegations that a "rogue unit" had existed within SARS after The Sunday Times published reports about it in October 2014.
The report KPMG produced suggested the unit used illegal methods and was rogue in nature.
Allegations withdrawn
KPMG, however, publicly withdrew the conclusion of the SARS report in September 2017, following an investigation by KPMG International into the group’s South African unit after it was revealed the auditing company did work for numerous Gupta-linked companies.
The auditor said at the time that although KPMG International did not find evidence of illegal behavior or corruption, it did find a number of instances in which their work fell "well short" of the quality they expected.
KPMG SA CEO Trevor Hoole and seven other members of its executive leadership resigned at the same time that the results of the internal investigation were made public.
Furious at KPMG's withdrawal of the report, Moyane said that KPMG had acted in an unethical manner and had irrevocably transferred all intellectual property rights of the report to SARS. He threatened to sue the auditing firm.
In March, the Ntsebeza Inquiry received the final version of the SARS rogue-unit report from KPMG. The inquiry was launched by the South African Institute of Chartered Accountants to independently investigate allegations that some of its members employed by KPMG may have contravened the institute’s code of professional conduct.
It is specifically investigating the work that certain KPMG employees did for Gupta-linked firms from January 2013 onward as well as in compiling the SARS report.
SARS insiders, who spoke to News24 on condition of anonymity, said they believe a basic conflict check should have been done by KPMG before they accepted the SARS brief.
"Walter was a service provider and based on that alone they should have declined SARS," one insider said.
"There were numerous mentions made in the KPMG report of Belinda Walters, saying she made allegations personally."
Added to this was the fact that the Sikhakhane panel report, which KPMG also relied on, specifically mentioned the Hennie Delport case.
Even though KPMG retracted the SARS rogue unit report, the repercussions of it are still felt in South Africa today.
Repercussions
Three ex SARS executives: Pillay, van Loggerenberg and Andries Janse van Rensburg were charged on allegations that SARS bugged the NPA’s offices in 2007 in a project called Sunday Evenings.
KPMG spokesperson Nqubeko Sibiya told News24 that Few was employed by KPMG South Africa from 2001 to 2017.
"Mr Few and, a colleague, Mr Dean Friedman, were appointed in 2007 to act as curators in a long-running asset forfeiture matter relating to various businesses. During the course of this engagement, Mr Few and Mr Friedman, in their capacity as curators, engaged Ms Walter, through Belinda Walter Attorneys Inc, to provide legal services," Sibiya said.
The auditing company however distanced itself from the appointment, saying that Walter’s company was not appointed by KPMG, but rather by the curators whose fees and services were funded by the Asset Forfeiture Unit and/or the estate.
KPMG said the curators used various legal advisors over the years including Steyn Kinnear Attorneys, Belinda Walter Attorneys Inc, Morné Coetzee Attorneys and BDK Attorneys.
"Belinda Walter Attorneys Inc provided services during the period from September 2013 to January 2014. In April 2014, the curators formally terminated the services of Belinda Water Attorneys Inc."
Sibiya said that in December 2014, KPMG SA was engaged by SARS to provide forensic services and to perform an extensive document review exercise, which resulted in the SARS Report.
"This engagement was unrelated to the curatorship appointment of Mr Few and Mr Friedman. In addition, neither Mr Few nor Mr Friedman worked on the SARS engagement," said Sibiya.
"KPMG does not believe a conflict of interest existed at the time of its appointment to carry out the SARS engagement."
SARS told News24 it had no record of KPMG ever disclosing to them that Walter was contracted to them in any way. "The information will be taken into consideration," the tax agency said.
Few told News24 that he would not comment, and Walter did not respond to questions sent to her.
