KPMG South Africa clears out top lead­er­ship over Gupta scan­dal

Chief ex­ec­u­tive Trevor Hoole and sev­eral others re­sign

Arab News - - BUSINESS -

JOHANNESBURG: Global au­di­tor KPMG cleared out its South African lead­er­ship on Fri­day af­ter damn­ing find­ings of an in­ter­nal investigation into work done for the Gup­tas, busi­ness­men friends of Pres­i­dent Ja­cob Zuma ac­cused of im­prop­erly in­flu­enc­ing gov­ern­ment con­tracts.

KPMG’s investigation did not iden­tify any ev­i­dence of il­le­gal be­hav­ior or cor­rup­tion but it did find that work done for Gupta fam­ily firms “fell con­sid­er­ably short of KPMG’s stan­dards,” the au­di­tor said in a state­ment.

“This has been a painful pe­riod and the firm has fallen short of the stan­dards we set for our­selves, and that the public rightly ex­pects from us,” new South African CEO Nh­lamu Dlomu said.

“I want to apol­o­gize to the public, our peo­ple and clients for the fail­ings that have been iden­ti­fied by the investigation.”

KPMG said it would do­nate the 40 mil­lion rand ($3 mil­lion) it earned in fees from Gup­ta­con­trolled firms to char­ity and re­fund 23 mil­lion rand it earned com­pil­ing a con­tro­ver­sial report for the South African tax ser­vice.

South African chief ex­ec­u­tive Trevor Hoole, chair­man Ahmed Jaf­fer, chief op­er­at­ing of­fi­cer Steven Louw and five se­nior part­ners all re­signed.

“I ab­so­lutely un­der­stand that ul­ti­mate re­spon­si­bil­ity lies with me,” Hoole said in a state­ment.

KPMG is also seek­ing to take dis­ci­plinary ac­tion to dis­miss Jacques Wes­sels, the lead part­ner on au­dits of Gupta-linked firms, it said. Wes­sels did not an­swer a call to his mo­bile phone seek­ing com­ment.

An­drew Cranston, for­mer CEO of KPMG in Rus­sia, has been ap­pointed as in­terim chief op­er­at­ing of­fi­cer.

KPMG is one of sev­eral global firms to be dragged into the Gupta scan­dal.

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

The Bri­tish arm of Bell Pot­tinger col­lapsed this week af­ter the Lon­don-based global public re­la­tions agency’s clients de­serted it be­cause of a back­lash over a racially charged po­lit­i­cal cam­paign it ran for the Gup­tas.

Global con­sul­tancy McKin­sey is also be­ing in­ves­ti­gated by South Africa’s Par­lia­ment over whether it know­ingly let funds from state power util­ity Eskom be di­verted to a Gupta com­pany as a way of se­cur­ing a $78 mil­lion con­tract to ad­vise Eskom, the state power util­ity.

McKin­sey is car­ry­ing out its own investigation, but has de­nied wrong­do­ing.

KPMG said it would do­nate the $3 mil­lion it earned in fees from Gupta-con­trolled firms to char­ity. (Reuters)

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