KPMG auditor accused of turning a blind eye
EMBATTLED audit firm KPMG has landed in more controversy after it was found wanting in its audit of beleaguered VBS Mutual Bank. The fallout over the missing millions in VBS and how auditors missed this led to KPMG suspending its head of financial services audit, Sipho Malaba.
The unit is the firm’s largest business unit. Malaba, who also leads the firm’s strategic projects, was the lead independent audit partner on VBS, whose currency is under curatorshipafter a liquidity crisis.
In his Linkedin profile, Malaba says he is skilled in internal audit, tax, external audit, accounting, corporate governance and regulatory reporting.
COMPANY ACCOUNTANT SUSPENDED FOR ANOMALIES,WRITES
KABELO KHUMALO
Despite his extensive skills and experience as a chartered accountant, questions over his conduct have arisen after the SA Reserve Bank (Sarb) laid bare the rot the curator found at VBS, charging that the lender had manipulated its own financial information.
Sarb deputy governor Kuben Naidoo said in an affidavit that
VBS could not account for nearly R1 billion deposited with the bank.
Sarb further charged that last month the liquidity of VBS amounted to just R24.7 million, despite the bank claiming it held total deposits “ostensibly” in the region of R2.9bn.
“I say ‘ostensibly’, because Anoosh Rooplal (the curator) has been unable to confirm the veracity of a material portion of the so-called corporate deposits, which amount to about R900m,” said Naidoo.
There are claims that Malaba ignored the anomalies as he kept a close relationship with the bank, which had extended loans to him.
VBS referred questions on whether it had granted loans to Malaba while he was auditing its books to the curator.
In announcing a new leadership team, which included Malaba, in the wake of the fallout of the Guptaowned Linkway last year, KPMG SA’S chief executive, Nhlamu Dlomu, hailed its experience.
Organisation Undoing Tax Abuse (Outa) chief operations officer Ben Theron said the firm had allowed greedy individuals to influence its operations.
“We urge KPMG to take decisive actions in its journey to restore its reputation. We advise all other players in the industry to ensure they operate with the highest level of integrity,” he said.
Sarb said that based on the curator’s initial assessment, there might have been fraudulent reporting and transactions.