KPMG’S TE­FLON MAN

Financial Mail - - FEATURE - Ann Crotty crottya@bdfm.co.za

Though he played an in­flu­en­tial role at the Gupta-linked au­dit­ing firm for many years, for­mer chair­man Yunus Sule­man has some­how man­aged to stay out of the spot­light

In all the ca­reer-de­stroy­ing fuss sur­round­ing KPMG’S “sub­stan­dard” work re­lat­ing to the Gup­tas and the SA Rev­enue Ser­vice, one key player has re­mained un­scathed, in­deed un­no­ticed. Yunus Sule­man didn’t even re­ceive a pass­ing men­tion in the head­line-grab­bing mea culpa re­leased by KPMG in late Septem­ber. That con­fes­sion fol­lowed a sup­pos­edly com­pre­hen­sive in­ves­ti­ga­tion into al­le­ga­tions of ir­reg­u­lar­i­ties and mis­con­duct and iden­ti­fied eight part­ners who were forced to re­sign, in­clud­ing chair­man of the board Ahmed Jaf­fer.

Jaf­fer had taken up the chair­man’s po­si­tion only in 2016. CEO Trevor Hoole, who had taken over from Moses Kgosana as CEO in May 2016, was also one of the de­par­tees.

That Sule­man got no men­tion was re­mark­able, though per­haps not en­tirely sur­pris­ing. Sule­man, who was the au­dit firm’s front man for years, was ap­pointed chair­man of KPMG in 2007 and re­mained in that po­si­tion un­til March 2015. He joined the firm as a part­ner in 2002 at around the same time the Gup­tas be­came KPMG clients. Sule­man was one of the four KPMG part­ners who at­tended the Gupta wed­ding in Au­gust 2013.

In its Septem­ber mea culpa KPMG said it should have re­signed as au­di­tors ear­lier than March 2016. “KPMG re­grets that its as­so­ci­a­tion with the Gup­tas and their busi­ness en­ti­ties went on for far too long,” said KPMG In­ter­na­tional.

While Hoole and Kgosana have be­come ver­i­ta­ble house­hold names, it is al­most im­pos­si­ble to find any­one able to link Sule­man’s name with KPMG.

He is cur­rently a nonex­ec­u­tive di­rec­tor of three ma­jor Jse-listed com­pa­nies, Tiger Brands, Lib­erty Hold­ings and Gold Fields. None of these com­pa­nies’ an­nual re­ports re­veals that Sule­man was pre­vi­ously chair­man of KPMG. This seems a sig­nif­i­cant over­sight given that un­til 12 or so months ago it was a ti­tle worth flaunt­ing in the small com­mu­nity of nonex­ec­u­tive direc­tors. The CVS pro­vided by each of the three com­pa­nies merely re­fer to Sule­man’s au­dit­ing ex­per­tise. No men­tion is made of him be­ing a part­ner at a ma­jor au­dit firm, let alone be­ing the chair­man of one of the big four.

In July 2016 Gold Fields’ chair at the time, Ch­eryl Caro­lus, said his ap­point­ment of­fered the com­pany a strong fi­nan­cial and gov­er­nance skills set, “as he has ex­ten­sive ex­pe­ri­ence in the au­dit­ing pro­fes­sion and has worked in var­i­ous ca­pac­i­ties with listed com­pa­nies in the SA re­tail, fi­nan­cial ser­vices, oil & gas and man­u­fac­tur­ing sec­tors.”

Much fur­ther on in the press state­ment, af­ter men­tion of his other di­rec­tor­ships in­clud­ing Al­baraka Bank, is a cur­sory ref­er­ence to his pre­vi­ously be­ing chair of KPMG.

Sule­man is on the au­dit com­mit­tee of each of the three listed com­pa­nies. At Gold Fields he is also on the so­cial and ethics com­mit­tee, the risk com­mit­tee and the safety, health and sus­tain­abil­ity com­mit­tee. At Tiger Brands he is also on the risk and sus­tain­abil­ity com­mit­tee.

Sule­man had been with Arthur An­der­sen for 20 years un­til 2002 when chunks of it were in­te­grated with KPMG fol­low­ing the En­ron-scan­dal-in­duced col­lapse of Arthur An­der­sen. Shortly af­ter his ap­point­ment as chair­man, KPMG ap­pointed Kgosana as chief ex­ec­u­tive. In an in­sight­ful in­ter­view with

Alec Hogg in 2012 Sule­man says the ap­point­ments re­flected KPMG’S fo­cus, which was “to make sure we have a to­tally black lead­er­ship team and that we com­mit to trans­for­ma­tion in a much big­ger way than we’ve ever done be­fore 2007. That set the plat­form to where we are to­day.”

Syg­nia’s Magda Wierzy­cka be­lieves this could touch on the much big­ger prize that was at stake in the Gupta busi­ness. “It was about get­ting ac­cess to the huge vol­umes of gov­ern­ment work.”

The Fi­nan­cial Mail was un­able to get com­ment from Sule­man and KPMG was un­der­stand­ably curt in its re­sponse to a num­ber of ques­tions posed. One thing seems cer­tain: even if KPMG be­lieved Sule­man played a key role in the Gupta re­la­tion­ship, it is not go­ing af­ter him.

A spokesman for the au­dit firm said Sule­man’s re­tire­ment, at 58, from the firm was not con­nected to the Gup­tas. He said Sule­man re­tired be­cause he “wanted a sec­ond ca­reer as a nonex­ec­u­tive di­rec­tor and to pur­sue his own in­ter­ests.”

Kgosana has not been as lucky as Sule­man. Since the Gupta e-mail leaks ex­posed “ques­tion­able” be­hav­iour, he has re­signed from most of his di­rec­tor­ships, in­clud­ing Im­pe­rial, Fa­mous Brands and Alexan­der Forbes.

What it means: While Yunus Sule­man’s depar­ture from KPMG seemed linked to the Gupta scan­dal, the au­dit­ing firm said he was leav­ing to pur­sue his own in­ter­ests

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