Bar­clays Africa re­views KPMG re­la­tion­ship

Business Day - - FRONT PAGE - Renee Bonorchis /Bloomberg

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’

Mike Brown

Mike Brown

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