GORD­HAN LASHES KPMG

Sunday Observer - - NEWS - UR­BAN -

DPravin Gord­han has threat­ened to sue au­dit firm KPMG and de­manded an apol­ogy for the dam­age the com­pany had caused with the con­tro­ver­sial South African Rev­enue Ser­vice “rogue unit” re­port.

Eight se­nior ex­ec­u­tives were forced out in a ma­jor shake-up on Friday.

The firm also an­nounced it had with­drawn the SARS rogue unit re­port for fall­ing short of the stan­dard of work the com­pany ex­pected.

For­mer fi­nance min­is­ter Gord­han has been un­der in­ves­ti­ga­tion by the cur­rent lead­er­ship of SARS and the Hawks over the “rogue unit”.

KPMG said “the ev­i­dence in the doc­u­men­ta­tion pro­vided to KPMG South Africa does not sup­port the in­ter­pre­ta­tion that Gord­han knew, or ought to have known, of the ‘rogue’ na­ture of this unit.

“We recog­nise and re­gret the im­pact this has had.”

De­mand­ing an apol­ogy, Gord­han said the col­lab­o­ra­tion of KPMG ex­ec­u­tives with “ne­far­i­ous char­ac­ters” in SARS had led to “state cap­ture” of the in­sti- tu­tion.

On Friday the firm an­nounced the res­ig­na­tion of Chief Ex­ec­u­tive Trevor Hoole, Chief Op­er­at­ing Of­fi­cer Steven Louw, chair­per­son Ahmed Jaf­fer and five se­nior part­ners. “I ab­so­lutely un­der­stand that ul­ti­mate re­spon­si­bil­ity lies with me,” Hoole said in a state­ment.

KPMG is also seek­ing to take dis­ci­plinary ac­tion to dis­miss Jac­ques Wes­sels, the lead part­ner on au­dits of Gup­talinked firms, it said.

Si­phon­ing

KPMG has been em­broiled in con­tro­versy in the past few weeks over the work it did for the Gup­tas, in­clud­ing the si­phon­ing of R30m from a dairy farm in Vrede, Free State, to pay for the lav­ish wed­ding in Sun City in 2013.

The firm said on Friday it ac­knowl­edged the mis­takes that hap­pened and they had been work­ing for the Gup­tas since 2002.

Nh­lamu Dlomo was Friday ap­pointed to re­place Hoole.

Gord­han said he wel­comed the with­drawal of the KPMG “Sars” re­port, but was “sur­prised by the scant re­gard shown for their role in the “cap­ture” of the rev- enue ser­vice and the huge dam­age that it has done to the liveli­hoods and rep­u­ta­tions of a very pro­fes­sional, hon­est and loyal group of pub­lic ser­vants.

“It is un­for­tu­nate that a com­pany with the stature of KPMG, with a re­spon­si­bil­ity and obli­ga­tion to be ob­jec­tive, has been found to be want­ing. “This is ex­ac­er­bated by their col­lab­o­ra­tion with the Gupta fam­ily.”

The au­dit­ing com­pany also said it would do­nate R40m it re­ceived from the Gup­tas over the years to ed­u­ca­tion and to or­gan­i­sa­tions fight­ing cor­rup­tion in the coun­try.

In his at­tack, Gord­han said KPMG should have the in­tegrity and hon­esty to say the re­search and in­ves­tiga­tive unit cre­ated in SARS was le­gal and the de­tec­tion and com­bat­ing of the il­licit to­bacco trade and ef­forts to end tax eva­sion was law­ful.

Aft e r l e a ked e - mails , KPMG In­ter­na­tional con­ducted an in­ves­ti­ga­tion into its South African op­er­a­tion and found that the com­pany should have cut ties with the Gup­tas long be­fore March last year.

Pravin Gord­han.

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