KPMG chiefs ousted in South Africa scandal

Probe reveals accountants attended tainted tycoon’s wedding

KPMG has cleared out its top team in South Africa after it became embroiled in a fraud scandal that has already destroyed public relations firm Bell Pottinger.

Five senior partners as well as chief executive Trevor Hoole and chairman Ahmed Jaffer resigned yesterday as the British accounting giant published damning findings from an internal investigation.

It is understood that Barclays is now reviewing its ties to KPMG, which audits the accounts of a number of firms that have a strong presence in South Africa. Earlier this week the Mail revealed how investment house Old Mutual was also considering its contract with the accountant.

KPMG audited the accounts of billionaire businessmen brothers Atul, Ajay and Rajesh Gupta. The trio were close to South African president Jacob Zuma and have been accused by a public watchdog of improperly influencing government contracts.

Firms associated with the Guptas are coming under increasing pressure from activists in South Africa.

KPMG said last night that its internal probe into its work for the Guptas found work that fell ‘considerably short of KPMG’s standards’ – but was not illegal.

The auditor accused staff at Gupta- owned businesses of misleading accountants.

KPMG said: ‘We regret that our association with the Guptas and their business entities went on for far too long.’

They accepted that four KPMG partners should not have attended a f lavish Gupta family wedding ( pictured) in 2013 – even if no rules were broken. One later described the wedding as ‘ the event of the millennium’ in a leaked email.

It comes in the same week that financial public relations firm Bell Pottinger’s British arm collapsed into administration after it was accused of running a racially divisive PR campaign for the Guptas, and clients fled.

KPMG is still under investigation by South Africa’s IRBA, the auditors’ regulatory body, which can strike firms off its register.

And major companies such as Old Mutual, British American Tobacco and BHP Billiton are also coming under increasing pressure to withdraw their business from KPMG.

Mmusi Maimane, the leader of South African opposition Democratic Alliance, welcomed the resignations but called for a criminal probe, saying: ‘KPMG must be subject to a full investigation both locally and internationally.’

The accountant’s new chief executive in the country, Nhlamu Dlomu, said: ‘The firm has fallen short of the standards we set for ourselves,ourselves and that the public rightly expects from us.

‘I want to apologise to the public, our people and clients for the failings that have been identified by the investigation.’

Both Zuma and the Guptas deny wrongdoing and say they are victims of a politically motivated witch-hunt. They have not been charged with any crime. KPMG was also auditor of Rolls-Royce, HBOS, Co-op Bank and football’s world governing body Fifa when they were all mired in controversy.

Bosses said they would donate the £2.2m in fees it earned in fees from Gupta-controlled firms to charity.