Sarb denies ordering banks to do business with KPMG

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.