Audit firm clears out SA bosses over Gupta scandal

Ivan Schwartz
September 17, 2017

"While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG's standards", said Andrew Cranston, a senior partner from the KPMG global network who will come in as interim chief operating officer for the South African business following the resignation of Steven Louw. KPMG South Africa audited Gupta-owned firms for 15 years until March 2016, when it resigned the contract.

KPMG has cleared out the management of its South Africa division, after the firm was implicated in the growing scandal surrounding businesses linked to the controversial billionaire Gupta family.

Five senior partners as well as chief executive Trevor Hoole and chairman Ahmed Jaffer were ousted on Thursday as the British accounting giant published damning findings from an internal investigation.

KPMG said it would donate the £2.2 million in fees it earned in fees from Gupta-controlled firms to charity.

The others include consultancy firm‚ McKinsey‚ business systems company‚ SAP and disgraced United Kingdom public relations firm‚ Bell Pottinger.

KPMG said that it has made a decision to take disciplinary action seeking dismissal in relation to Jaques Wessels, the lead partner on the non-listed Gupta businesses.

Zuma and the Guptas deny any wrong-doing and say they are the victims of a politically motivated witch-hunt.

"Over time, the full measure of the damage caused to Sars arising from the KPMG report has manifested itself in a tarnished reputation for the institution, questionable independence, and lower levels of compliance with tax and customs law".

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The firm said no evidence of illegal or corrupt behaviour was uncovered.

"I absolutely understand that ultimate responsibility lies with me".

EFF spokesperson Mbuyiseni Ndlozi took to Twitter to state that KPMG should face criminal charges for their role in state capture and corruption.

Future SA therefore called on the South African business community to continue to review their relationship with KPMG and related activities in money laundering and tax evasion; encourage their auditors, other than KPMG, to avoid the sort of advice and activities that KPMG involved itself in; and call for an independent and public inquiry into KPMG's activities in South Africa.

She said: "I want to apologise to the public, our people and clients for the failings that have been identified by the investigation".

Brothers Ajay, Atul and Rajesh Gupta have interests in computer, mining, media, travel, energy and technology and employ around 10,000 people through their company Sahara Group.

KPMG's move to ust its top South African team comes in the same week that financial public relations firm Bell Pottinger's British arm collapsed into administration as clients fled after it was accused of running a racially divisive PR campaign for the Guptas.

Other reports by GizPress

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