PREMIUM FREE TRIAL

SA’s oil reserve sale probe halted as KPMG involvement raises suspicions

CAPE TOWN — While Energy Minister Mmamaloko Kubayi’s halting of the probe into the breath-taking sale of SA’s oil reserves may be a welcome respite for the shadier Zuptoids involved, her reason for doing so cannot be faulted. It’s those cynical local KPMG bean-counters polluting the waters again. They did a key financial analysis into the shady unauthorised oil deal – and everybody knows via their recent confession of complicity in the bogus, vindictive SARS rogue unit probe, that they’re highly suspect. Shades of the Bell Pottinger debacle, with potentially similar results as KPMG’s reputation begins to resemble a battered old township taxi with a wonky wheel. As the risk increases, less and less people pay money to ride in it. Others may demand their fares back after suffering post-traumatic stress disorder. Soon after entering her post in late March this year, Kubayi found “glaring governance problems,” with the 2015 cheap sale of 10 million crude oil barrels, ordering an immediate probe. Now her professed headache is the credibility of KPMG. Perhaps she should sit down for a reassuring cup of tea with SARS Commissioner Tom Moyane. He reckons, that besides breaking client confidentiality, KPMG are squeaky clean. – Chris Bateman

By Paul Burkhardt

(Bloomberg) – South Africa’s probe into the sale of 10 million barrels of its crude oil reserves may be delayed after Energy Minister Mmamoloko Kubayi said she has some concerns because a key financial analysis in the investigation was conducted by KPMG LLP.

Kubayi said she wants assurances from the country’s Central Energy Fund about the report after KPMG’s local unit became embroiled in a corruption scandal revolving around members of the wealthy Gupta family, who are friends of President Jacob Zuma. Eight top executives have resigned from the auditing firm’s South African office and it’s been dropped by some local clients.

File Photo: Newly appointed Minister of Energy, Mmamoloko “Nkhensani” Kubayi sworn in by Justice Sisi Khampepe.

Kubayi, who was named energy minister at the end of March, said a month later that she found “glaring governance problems” related to the crude sale in 2015, when prices were at an eight-year low. The CEF also failed to inform National Treasury of the sale, which was a requirement, according to a report last year by the Auditor-General.

Law firm Allen & Overy led an investigation into the sale, but recommended that a financial analysis be conducted as well, Kubayi said. While the work has been completed, Kubayi wants assurances about the KPMG report before making the results public and considering further action, she said in a phone interview Tuesday.

Read also: SA’s ‘oilgate’ – is the ruling party accountable to no-one?

“That is my major headache currently,” she said. “I need to raise my concerns of their credibility.”

Spokesman Nqubeko Sibiya didn’t immediately respond to emailed questions.

The financial audit was needed “so that we can take a decision whether we’re going to court to declare the contracts invalid, whether we’re going to recognize the contracts,” Kubayi said. The minister has set targets to take action regarding the oil sale, but needed to deal with the report first, she said.

The minister said she also plans to restructure the governance model of the CEF and is finalizing the company that will undertake that task.

For a deeper understanding of the world of money and greater financial control, upgrade to BizNews Premium.