In trouble? Rent a darkie

KPMG SA has seen the light: when greed gets the better of you and threatens to destroy your company, find a willing or gullible black executive to clean up your mess.

This, at least, seems to be the long-established tradition among companies that have been caught with their hands in the cookie jar. In such instances, black executives suddenly become little more than employment-equity windowdressing, the type of person who gets dragged along to pitch for business from state-owned entities.

These are often the same people who work in these firms almost unnoticed by their bosses for ages, before overnight acquiring all the desired experience and skills to step in when the company gets caught in unethical or outright criminal behaviour.

Nhlamu Dlomu has worked at KPMG for five years. In September, she succeeded Trevor Hoole as CEO when he left with eight others who were the leading partners in KPMG’s nefarious dealings with the Gupta family and with the SA Revenue Service (SARS). Hoole had replaced Moses Kgosana, who joined KPMG in 2002 before rising all the way to the top.

Kgosana seemed to have acquired a taste for the finer things in life. He must have taken such a liking to the fare on offer at the Guptas that for all those years he was at the helm, KPMG all but turned a blind eye to the family’s questionable business activities.

Under Kgosana’s leadership, KPMG says it “audited” the accounts of 33 companies owned by the fugitive family. Only, in that period, not once did KPMG seem to notice the outright money laundering and thieving that was taking place in those companies.

Now, auditors are meant to be the last line of defence against corrupt and unethical corporate behaviour. Here, KPMG clearly wasn’t.

Until his unceremonious departure, Hoole had been the lead partner for some time (he joined the firm in 1975) before replacing Kgosana in 2015. He’d clearly been part of the rotten culture for years. Under his leadership, KPMG continued in the same tradition it had under Kgosana. But it also extended its brand of professionalism to other shady individuals linked to the Saxonwold Shebeen. Enter SARS and Tom Moyane.

Helping to get rid of a sitting finance minister, his deputy and 55 honest and hardworking SARS executives was all in a day’s work for KPMG. Along the way, KPMG discovered such highly lucrative revenue streams as copying and pasting instructions onto pages and charging exorbitant prices for it. In the end, the report cost SARS – no, you, the taxpayer – a grand R23million. It cost billions more in uncollected taxes, lost investment, lost jobs and loss of investor confidence. It turned the country into a haven for corruption.

Then Hoole and his colleagues allowed themselves to be caught, so it was time to get rid of them.

But what if they talked? No problem: pay them all golden handshakes to shut their mouths.

KPMG International then evidently cast around for a black face to clean up the mess and pacify an angry nation. Enter Dlomu, the human resources director. Agreeing to mop up such vomit, you’d imagine, makes her either over-courageous or gullible or both.

But the powers-that-be at KPMG strategised further. Realising Dlomu was perhaps short a spot of credibility and experience, they settled on the very respectable Wiseman Nkuhlu for chairman. After a term as head of the Institute of Directors, Ansie Ramalho joined Nkuhlu as a non-executive director.

Before lending his enormous credibility to KPMG, Nkuhlu, a peerless pioneer and father of black accounting in South Africa, commanded a lot of respect. He taught black accountants, funded their training or hired them when established white companies in apartheid SA would not touch them with the longest pole. That’s exactly why he is the perfect candidate to knock on the doors of the regulators and mop up the mess left at KPMG.

Of course, Nkuhlu and Dlomu are not the only black people who have suddenly been pushed to the front to face the music. Steinhoff, for example, has installed Heather Sonn as chair to put out the fires of accounting fraud consuming the retailer.

Then there’s Pioneer Foods which, in 2010, found itself in a tight spot, facing billions of rand in fines over bread-price manipulation. Pioneer’s controlling shareholder, PSG Group, having robbed the poor by inflating the price of a staple food, sent Zithulele KK Combi to government to make peace.

The gambit paid off. Pioneer Foods got away with a reduced R195-million fine that worked out to only 19c/share. Its fellow conspirator in the bread cartel, Tiger Brands, also got away with a R98-million fine.

Tiger unleashed its own blacks to try to win over an angry government. Spokesman Mzwanele “Jimmy” Manyi put his Black Management Forum (BMF) role on hold to plead for leniency for his masters. But he was never going to be a good enough candidate.

So Tiger Brands found a smarter black man, Peter Matlare, who had proved himself at Primedia before moving on to the SABC and then Vodacom. Matlare was soon joined by finance director Funke Ighodaro.

A not dissimilar story unfolded at Alexander Forbes in 2005: Peter Moyo became CEO to clean up a R900-million retirement fund scandal perpetrated by his predecessors. Once the job was done, Actis – a private-equity firm that bought the retirement fund administrator – installed Bruce Campbell as executive chair to supervise Moyo, a position that had not existed before.

Ironically Manyi, in his capacity as BMF president, regained his activist’s voice and criticised Campbell’s appointment at the same time that he was defending the bread companies’ sins against black consumers.

When it earned the Public Investment Corp’s wrath for lack of transformation, Barloworld followed the same script. It appointed Dumisa Ntsebeza as its first black chair in June 2007.

Again, Barloworld created the position of deputy chairman and gave it to Trevor Munday. Black people interpreted that to mean the deputy, Munday, was there to supervise the black chairman. Munday quit six months later.

So to return to KPMG: Dlomu and Nkuhlu have made themselves the black face of the fraud that has masqueraded as some of the company’s audit and professional work. They are there to do what they can to save the firm. But KPMG’s apparent culture of corruption helped take down one of SA’s few black banks, VBS Mutual Bank. It will not be the last.

KPMG also audits three other major banks – Nedbank, Barclays Africa and Standard – as well as dozens of other companies in which billions of rand in pension money is invested. But Nkuhlu, who has until now always been true to his first name, stands to lose the most in this corrupt project to which he’s lent his good reputation.