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.

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