WE’RE SORRY, 63 MIL­LION TIMES

7 out R40m to char­ity R23m pay­back

The Citizen (KZN) - - FRONT PAGE - Yad­hana Jadoo

Au­dit firm turned a blind eye to the Gup­tas’ busi­ness deal­ings – and in an ap­par­ent blood­bath, some bosses have fallen on their swords. KPMG will now ‘pay back’ mil­lions.

Call to dis­bar bosses in­volved in Gupta or Sars projects and for cor­po­rate SA to cut ties with the firm.

Au­dit­ing firm KPMG en­abled the Gup­tas’ dis­grace­ful con­duct in the fam­ily’s busi­ness deal­ings to con­tinue un­ex­posed, and those re­spon­si­ble must be brought to book, civil so­ci­ety or­gan­i­sa­tions say.

They are also de­mand­ing that cor­po­rate South Africa can­cel its busi­ness con­tracts with KPMG in light of on­go­ing rev­e­la­tions that it thus played a cen­tral role in fa­cil­i­tat­ing state cap­ture.

The firm yes­ter­day an­nounced the de­par­ture of top lead­ers, in­clud­ing CEO Trevor Hoole, who was re­placed by Nh­lamu Dlomu.

The firm has also of­fered to re­pay Sars the R23 mil­lion fee it re­ceived. It also of­fered to make a do­na­tion of R40 mil­lion to char­ity.

This fol­lowed an in­ter­nal in­ves­ti­ga­tion by KPMG In­ter­na­tional into its South African di­vi­sion’s work on be­half of the Gup­tas and a 2014-2015 re­port on al­le­ga­tions of ir­reg­u­lar­i­ties and mis­con­duct for the SA Rev­enue Ser­vice on the al­leged “rogue unit”.

Jac­ques Wes­sels, the lead part­ner on the au­dits of non-listed Gupta en­ti­ties, will be sub­jected to dis­ci­plinary ac­tion seek­ing dis­missal.

KPMG said the in­ves­ti­ga­tion “did not iden­tify any ev­i­dence of il­le­gal be­hav­iour or cor­rup­tion by part­ners or staff”, but it found “work that fell con­sid­er­ably short” of the firm’s stan­dards.

The Or­gan­i­sa­tion Un­do­ing Tax Abuse (Outa) said au­dit­ing was meant to ex­pose and ques­tion du­bi­ous flows of funds and this was par­tic­u­larly ap­pli­ca­ble in the case of the Gup­tas, whose con­duct and links to President Ja­cob Zuma have been known about for some time. “KPMG should have been ex­tremely thor­ough in their au­dit and gov­er­nance checks of the Gupta fam­ily,” CEO Wayne Du­ve­nage said.

“It is an ab­so­lute dis­grace that an au­dit firm of the stature of KPMG was able to im­pli­cate a (for­mer) min­is­ter of fi­nance (Pravin Gord­han) and oth­ers in du­bi­ous and highly sus­pi­cious re­port­ing.

“Re­ports by au­dit firms of this na­ture have a sig­nif­i­cant im­pact on peo­ple’s lives, ca­reers and the out­comes of po­lit­i­cal de­vel­op­ments. We be­lieve KPMG was grossly neg­li­gent and out of line.”

Outa also de­manded fur­ther ac­tion be taken against the in­di­vid­u­als im­pli­cated and full resti­tu­tion im­ple­mented.

The Save SA Cam­paign said KPMG’s “col­lu­sion with the real rogues in Sars has desta­bilised our fi­nance min­istry, com­pro­mised Sars and re­sulted in loss of some of the finest pub­lic ser­vants”.

It de­manded the au­dit­ing in­dus­try ex­am­ine in depth the cause of the scan­dal, and the im­pact on hon­est peo­ple in the firm.

It also wants the In­de­pen­dent Reg­u­la­tory Board for Au­di­tors to in­ten­sify its in­ves­ti­ga­tion into KPMG and state cap­ture.

“The pro­fes­sion should also be­gin dis­bar­ring part­ners and ex­ec­u­tives who were part of the Gupta pro­ject and/or Sars pro­ject. Cor­po­rate SA, es­pe­cially those that signed the re­cently pub­lished busi­ness in­tegrity pledge, should cut ties with KPMG.”

Trevor Hoole – ex-CEO of KPMG I ab­so­lutely un­der­stand that ul­ti­mate re­spon­si­bil­ity lies with me. KPMG South Africa is a firm of hugely tal­ented peo­ple and I be­lieve it is the right thing for me to stand down and al­low a new CEO to re­store pub­lic trust and build a firm that once again sets the stan­dard for qual­ity and ethics.

DIS­GRACED. KPMG SA is reel­ing amid ac­cu­sa­tions of gross neg­li­gence.

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