‘No easy solution to KPMG matter’
IT WOULD be difficult for embattled audit firm KPMG to recover from the Gupta and SA Revenue Service scandals after it suffered reputational damage over its work with its former clients.
This was the assertion yesterday from economist Mike Schussler, who said the company’s scandal had damaged the country.
Yesterday the Independent Regulatory Board for Auditors (IRBA) confirmed it was still busy with its investigation into KPMG.
The investigation was launched in June after the scandal broke that R30 million from a dairy farm in Vrede, in the Free State, had been siphoned to fund the Gupta wedding in Sun City in 2013.
Former finance minister Pravin Gordhan has threatened to sue the auditing firm over its report on the alleged Sars rogue unit.
Schussler said it would take time for KPMG to recover from the scandal.
“It’s going to be very difficult for KPMG South Africa to recover because of the reputational damage it has suffered. It’s going to hurt KPMG and our country,” he said.
Schussler said people are asking questions about this saga. “People are asking what is being done about the real perpetrators.”
KPMG announced a few days ago that it was cutting ties with its top executives, including chief executive Trevor Hoole, chief operating officer Steven Louw and chairperson Ahmed Jaffer. Five other executives were also fired.
Nhlamu Dlomo has been appointed the new chief executive.
The investigation by IRBA into KPMG had not been completed and it was ongoing. Civil society has also called on KPMG to come clean on the matter.
This is despite the sacking of the eight top executives, an apology to Gordhan, the withdrawal of the report into the Sars “rogue unit” and committing to channel R40 million it received from the Guptas into education and fighting corruption.
KPMG also pledged to donate R23m it received from Sars to charity.
Civil society group Future South Africa said yesterday the decision by KPMG to fire its executives and withdraw the Sars “rogue unit” report was not the end of the story.
It said its report on Sars has damaged the tax agency.
“The ‘rogue unit’ narrative was a great disservice to public interest. One error would be understandable but the persistent lies and distortions, and the pattern by which allegations were reported, lead to one conclusion – the KPMG report was not motivated by public interest,” said Future SA.
It also said KPMG had failed a serious test when it converted Gupta wedding expenses into business expenses.