Barclays Africa reviews KPMG relationship
Barclays Africa Group is reviewing its relationship with KPMG as the auditing firm comes under scrutiny for work for South African companies linked to the politically connected Gupta family. Nedbank Group continued to monitor service providers implicated in dealings involving the Guptas and could terminate relationships with them if needed and after a “robust internal process”, CEO Mike Brown said.
Barclays Africa Group is reviewing its relationship with KPMG, as the auditing firm comes under scrutiny for work on behalf of South African companies linked to the politically connected Gupta family.
In 2016, the nation’s biggest lenders including Barclays Africa’s Absa unit, closed bank accounts of businesses tied to the family, who are friends with President Jacob Zuma and in business with one of his sons.
The former public protector, Thuli Madonsela, alleged in November that Zuma allowed the Guptas to influence appointments to the Cabinet and the awarding of state contracts, which they deny.
KPMG allowed Gupta businesses to divert public money to pay for a wedding of members of the family, according to the amaBhungane Centre for Investigative Journalism.
Absa had met KPMG, KPMG International and the company’s lawyers and was given preliminary feedback on some aspects of the auditing firm’s internal investigation into its Gupta work, the bank said in response to questions on Thursday.
KPMG told Absa that it would provide more details when it presented the findings of its probe by the end of September, Barclays Africa said.
“After carefully considering the further information requested and the findings, Absa will be in a position to make a decision as to whether to continue to engage KPMG as its external auditors,” the lender said.
Save SA, which includes civil society groups and business leaders, has called on local companies to drop KPMG as an auditor because of the work it did for 36 entities tied to the Guptas since at least 2008.
A review by KPMG did not find any evidence of dishonesty on the part of the suspended partners, the company said in August.
KPMG spokesman Nqubeko Sibiya did not immediately answer e-mailed questions.
The Institute of Directors in Southern Africa has suspended co-branded activities with KPMG, including sponsorship of its golf day, while Sygnia Asset Management fired the audit firm. Other KPMG clients include Old Mutual and Standard Bank Group. Sibanye Gold has said it will wait for KPMG to complete its investigation before deciding.
“We have continued our engagement with KPMG at the highest level on this matter,” Old Mutual said on Thursday.
Nedbank Group, the insurer’s lending unit, continued to monitor service providers implicated in dealings involving the Guptas and could terminate relationships with them if needed and after a “robust internal process”, CEO Mike Brown said.
Standard Bank said it was “committed to doing business ethically and in accordance with all applicable laws and expects all of its counterparties to be similarly committed”.
“We exit relationships where that commitment is lacking,” it said.
STANDARD BANK ‘IS COMMITTED TO DOING BUSINESS ETHICALLY … AND EXPECTS ALL OF ITS COUNTERPARTIES TO BE SIMILARLY COMMITTED’