Zuma may exploit KPMG scandal to escape charges
President Jacob Zuma looks set to try to capitalise on the dark cloud hanging over auditing firm KPMG’s branch in SA as he begins a new bid to avoid facing corruption charges.
KPMG is facing a credibility crisis flowing from its work done for the Gupta family and the South African Revenue Service (SARS).
A forensic audit of Zuma’s finances formed part of the corruption case against him. It was conducted by Johan van der Walt, who compiled the report on the so-called SARS “rogue unit”. He is facing an investigation by the Independent Regulatory Board for Auditors for his work on the SARS report.
Van der Walt testified at the trial of Zuma’s former financial adviser Schabir Shaik, who was convicted of corruption and fraud in 2005 in the High Court in Durban. Judge Hilary Squires found that Van der Walt had been an impartial witness.
“Van der Walt … simply described chapter and verse, in extraordinary detail, the evidence that he culled from the mass of documents given to him to investigate,” Squires said.
“The suggestion in his crossexamination that he might be biased against the accused because of his long since national service as a policeman in the fraud investigation department, and the fact that his investigation efforts were paid by the state, can be safely dismissed as entirely without merit.”
Last week, the Supreme Court of Appeal dismissed Zuma’s bid to appeal against the High Court in Pretoria ruling that charges be reinstated against him. The appeal court found that the 2016 ruling that the decision in 2009 to drop the charges was irrational, “cannot be faulted”.
The decision whether Zuma will now face the corruption charges lies with National Prosecuting Authority (NPA) head Shaun Abrahams, who is accused of protecting him.
After Friday’s judgment, the Presidency said any person had the right to make representations to the NPA with an expectation that a “legitimate decision” would be made.
“These representations will be amplified in light of developments … not least of all are the recent revelations around the integrity of the audit report which underpins the prosecution,” Presidency spokesman Bongani Ngqulunga said.
KPMG conducted two forensic investigations into Zuma and Shaik. After Shaik was convicted, the firm conducted an investigation into Zuma’s affairs. The contents of the reports overlapped somewhat because they dealt with the same transactions.
Until now, Zuma has been using the “spy tapes” to delay his prosecution — recordings of phone conversations between former national director of public prosecutions Bulelani Ngcuka and former head of the disbanded Scorpions Leonard McCarthy. They discussed the timing of serving an indictment on Zuma, which recording was used to justify the withdrawal of the charges by then NPA boss Mokotedi Mpshe in 2009.
Supreme Court of Appeal Judge Mahomed Navsa took a dim view of the legality of this argument. “It is unsettling that different law-enforcement agencies of government appear to be spying upon each other.
“Insofar as the tape recordings of the telephone conversations are concerned, other than the hearsay evidence of the communications between the members of the NIA [National Intelligence Agency] and the NPA, we have no admissible substantiation concerning the authenticity or accuracy of the recordings,” the judgment read.
The Regulation of Interception of Communications and Provisions of Communication-
Related Information Act says an application for an interception has to be made to a judge.
“There is no indication of how the recordings came to be in the possession of Mr Zuma’s legal team,” Navsa said.
“It ought to have been an issue to which the NPA paid greater and focused attention. Instead, the NPA allowed itself to be cowed into submission by the threat of the use of the recordings, the legality of the possession of which is doubtful.”
Since Zuma took office, there had been a strong trend of the politicisation of the government’s intelligence function, said Prof Jane Duncan of the Univer- sity of Johannesburg. Political intelligence gathering had become central to the State Security Agency’s work since 2007. It should be possible through audit trails to discover how Zuma’s attorney Michael Hulley had got hold of the recordings, she said.
The fact that this information was not in the public domain pointed to a systemic failure in oversight, Duncan said.
In April 2009, the inspectorgeneral of intelligence said he was investigating the legality of the spy tapes. A report was presented to Parliament’s joint standing committee on intelligence, but was not made public.