Sarb de­nies or­der­ing banks to do busi­ness with KPMG

Weekend Argus (Saturday Edition) - - FRONT PAGE -

Con­sumer group AVI dropped KPMG af­ter 14 years of do­ing busi­ness with them.

En­ergy in­vest­ment firm Hulisani, Wits Univer­sity, Par­lia­ment’s med­i­cal aid scheme and fi­nan­cial ser­vices firm Sas­fin also cut ties with KPMG.

It was re­cently re­ported the Sarb or­dered the coun­try’s four ma­jor banks to con­tinue do­ing busi­ness with KPMG.

How­ever, yes­ter­day the Sarb de­nied the al­le­ga­tions.

It said Sarb gov­er­nor Le­setja Kganyago wanted to en­sure sta­bil­ity in the mar­ket.

This was dur­ing the Mone­tary Pol­icy Com­mit­tee me­dia con­fer­ence last month.

“The Sarb stated it would en­gage banks and au­dit­ing firms pri­mar­ily to un­der­stand the con­text so that it is bet­ter placed to man­age any po­ten­tial fi­nan­cial sta­bil­ity risks that may arise from the is­sue around KPMG.

These en­gage­ments have taken place but at no point did the Sarb in­struct banks on how they should deal with KPMG,” the Sarb said. The Sarb is gov­erned by the Banks Act that pre­scribes how an au­di­tor of a bank is ap­pointed and this is done by the Reg­is­trar of Banks.

The law is also very clear how the Reg­is­trar of Banks may with­draw the ap­point­ment of an au­di­tor.

This week in Par­lia­ment it said it had au­dited 35 com­pa­nies of the Gup­tas for a pe­riod of 14 years. MPs ac­cused KPMG of fail­ing to pick up red flags in the Gupta com­pa­nies for many years. They said its fail­ure to also pick up that the wed­ding ex­penses were con­verted into busi­ness ex­penses raised more ques­tions.

This re­lated to the Gup­tas’ Sun City wed­ding in 2013 that cost R30 mil­lion.

The South African In­sti­tute of Char­tered Ac­coun­tants and the In­de­pen­dent Reg­u­la­tory Board for Au­di­tors are also prob­ing KPMG.

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