DUMP KPMG NOW!
Students want UKZN to cut ties with auditing firm
STUDENT leaders at the University of Kwazulu-natal have called for the institution to end its relationship with disgraced audit firm KPMG.
The firm has been linked to a scandal involving the Gupta family and the handling of the SA Revenue Service “rogue unit” report.
The company, once considered one of the Big Four global auditors, conceded it was incorrect in how it had handled the report. Sars had asked KPMG to investigate allegations of a rogue unit, apparently created by Pravin Gordhan when he was Sars commissioner.
A number of South African firms have already parted ways with the auditing firm, while some were reviewing their relationships, following KPMG’S about-turn.
Among them were Sasfin, Investec, Absa, Growthpoint Properties, Hulisani and Sygnia Asset Management.
John Veihmeyer, chairperson of KPMG International, said on Friday that an independent investigation would be conducted by a senior South African legal figure.
Student leaders said KPMG, whose services have been used by the university, must be removed from their books immediately, to protect the integrity of UKZN. The university had appointed KPMG to conduct an investigation into fraudulent admissions at the Nelson R Mandela School of Medicine.
The R14 million report released in November to the university has not yet been made public.
KPMG was also recently appointed by the university to look into “a leaked exam paper”.
Nkosinathi Ndebele, UKZN medical school student representative council president, said they were worried about the university’s relationship with KPMG.
“With everything that’s currently going on regarding KPMG and their corrupt relationships, this raises many questions about the relationship that UKZN shared with it. We still haven’t been given the opportunity to access a medical school corruption report done by them, and we are now questioning if it was just a cover-up,” said Ndebele.
He said they felt robbed by KPMG. “We feel like we’ve been robbed because the university paid them millions. The entire country has lost trust in them because they are no longer credible, and so have we.
“We cannot work with them any more, we refuse to work with them and we are calling for UKZN to terminate all mandates with them to protect the integrity of our institution,” he said.
Central SRC President Noxolo Bhengu agreed with Ndebele.
“They no longer have any credibility and we cannot trust anything they do or say.
“If we want to be seen as a credible institution, we must terminate our relationship with them immediately,” said Bhengu.
The university recently took the Sunday Tribune to court to prevent it from publishing the contents of the KPMG report linked to corrupt admissions at its medical school.
An interim order was granted in its favour, but the final order was being opposed and is pending a hearing date. In replying affidavits, the university expressed unhappiness with KPMG’S work.
When UKZN was asked this week whether it would continue its relationship with KPMG or would terminate using its services, even for the current investigation, the institution’s acting spokesperson, Normah Zondo, declined to say.
She said: “As you are aware, you are one of the respondents cited in a high court matter involving publication of the KPMG report and other issues. An interim court order is currently in effect. By virtue of this, you would also be aware that the matter is sub judice, and that your legal counsel, together with that of the university, are currently in the process of applying for preferential dates for arguments to be heard in the matter.
“In the circumstances, the university finds your request for confirmation on affidavits that are before court troubling.
“In light of this position, we choose not to reply to any of your requests for confirmation, and the university’s rights are accordingly reserved.”
Meanwhile, Veihmeyer said he recognised that the firm needed to do much more to restore trust within South Africa. “We announced a set of significant actions last week.
“Given the issues involved in this matter to the country of South Africa, and the damage our actions have caused, the public deserves to know the full facts as quickly as possible. That includes not just what, but why they occurred.
“That is why there will be an independent investigation to provide the full and frank disclosure the South African public deserves,” he said.
Finance Minister Malusi Gigaba announced that the government would review all the work that has been done by the auditing firm.
The DA has said it would do the same in the 30 municipalities it governs across the country.
Economist Iraj Abedian, of Pan African Capital, warned yesterday that the review of the work of KPMG by the government would ruin the company.
“Basically, KPMG needed a miracle to survive. It’s almost untenable to continue,” said Abedian.
Gigaba said what has happened at KPMG needs to be investigated.
They were concerned about the fact that this damaged the reputation of the industry.
“In the immediate term, and as a measure to restore confidence in audits, all of government and its entities must consider reviewing their work programmes with KPMG, to ensure that their audit processes have not been compromised in any way, and to take appropriate steps if it has been compromised,” said the minister.