SOEs set to review all KPMG’s work

Auditing firm’s links with Guptas have tarnished their image, says Gigaba

FINANCE Minister Malusi Gigaba called on all government entities to consider reviewing their work programmes with KPMG’s local unit after the auditing firm found that work it had done for the Guptas fell short of its standards.

These developments have created a “bad image” and “further threaten to undermine our efforts in reinforcing confidence and enhancing a climate for investments”, Gigaba said on Friday. He called for the reviews “to ensure that their audit processes have not been compromised in any way, and to take appropriate steps if they have been compromised”.

Shortly after Gigaba’s statement, the National Assembly’s medical-insurance plan said it had decided to drop KPMG as its auditors.

“We have taken the decision today to dismiss KPMG on our worries that their reputational damage may spread to us,” Lechesa Tsenoli, Parliament’s Deputy Speaker and chairperson of Parmed’s board, said in an interview. “We are one of the smallest medical schemes, but I believe we are the first government-linked entity to dismiss KPMG.”

The auditing firm said on September 15 that its conclusions and recommendations in a report for Sars about a unit that allegedly spied on politicians should no longer be relied on. KPMG also announced the resignation of its chief executive Trevor Hoole, chairperson Ahmed Jaffer and six other executives.

An internal KPMG inquiry criticised the company’s role in advising a Gupta-linked business on the acquisition of a coal mine from Glencore and said four KPMG partners should not have attended the lavish Gupta family wedding.

The Reserve Bank has said it supports an independent investigation into KPMG’s dealings with the Guptas, who are in business with President Jacob Zuma’s son Duduzane and have been accused of using their political connections to win contracts from SOEs.

Sasfin and Hulisani have dumped KMPG as auditors and Barclays Africa said it was considering ditching the firm. – Bloomberg

PHOTO: BONGANI SHILUBANE Finance Minister Malusi Gigaba has urged all state-owned entities to review their work programmes with auditing firm KPMG after their Gupta revelations.

PHOTO: DAVID RITCHIE Parmed’s chairperson Lechesa Tsenoli has fired KPMG as their auditors.