KPMG auditor banned for State Capture; SA tourism surges; Gold soars; Zim Dollar Back

By Jackie Cameron

  • A KPMG auditor has been barred from accounting work for his role in the state capture scandal. KPMG senior employees were key Jacob Zuma allies, helping the former president’s friends, the Gupta brothers, tap into state coffers and dodge tax. KPMG accountants attended the lavish Gupta wedding at Sun City in 2013, and they were also involved in fabricating a report to discredit corruption busters at the South African Revenue Services.

  • As Reuters reports, former KPMG accountant Jacques Wessels, who was responsible for auditing the financial statements of Gupta-owned Linkway Trading, has been barred from using the CA (SA) designation after the cancellation of his membership, the SA Institute of Chartered Accountants (SAICA) said. But, he may be able to reapply for his membership of the body in five years. Wessels was just one of a large group of KPMG employees in the pockets of the Gupta family. SAICA has been criticised for moving very slowly on bringing corrupt auditors to book. South Africans will now be hoping that the police move quickly on Wessels and friends for their role in wreaking havoc on the economy through state capture and corruption. SAICA is under pressure to clean up the accounting profession following a series of high-profile corporate scandals involving its members, including disgraced former Steinhoff CEO Markus Jooste and Gupta-linked former Transnet and Eskom CFO Anoj Singh.
  • South Africa is growing in popularity as a tourism destination, with a marked rise in the number of international visitors. Statistics SA’s data showing that the tourism sector is on a growth path. SA saw a 4.2% increase in the number of foreign tourists in April compared to the same month in 2018, according to Statistics SA, and this is despite the economy shrinking by more than 3% in the first quarter of the year. Tourism contributed R426bn to the country’s economy in 2018 and SA’s tourism sector is the largest in Africa, according to the World Travel and Tourism Council. The sector accounts for about 1.5m jobs, or almost 10% of total employment in SA.
  • Gold rallied to a near six-year high on Monday as the US-Iran dispute intensified. Gold is seen as a safe-haven asset. Gold prices surged more than 1%, with speculators coming in. Analysts say gold is also getting some underlying support by central banks trying to cut rates. Trump imposed new U.S. sanctions on Iran on Monday following Tehran’s downing of an unmanned American drone and said the measures would target Iranian Supreme Leader Ayatollah Ali Khamenei. Gold prices have risen over 8% this month, and about $75 an ounce over the past week, says Reuters.
  • Johannesburg-listed mining companies. Sibanye, Harmony and AngloGold were the major movers upwards, all climbing by more than 3 to 4%. The JSE Ltd was the big loser on Monday, plummeting nearly 10%. This was after the stock exchange released very disappointing results. The JSE said it expects Headline Earnings Per Share to be between 25% and 35% than the same time last year. JSE revenue performance “largely reflects the reality of the difficult economic environment in South Africa which, in turn, impacts investor appetite”, the stock exchange said in a statement. It highlighted that:- Headline earnings per share (“HEPS”) for the group for the period is expected to be between 490.95 cents and 425.49 cents. This is between 25% and 35% lower than the 654.6 cents reported for the six months ended 30 June 2018 (“the comparative period”); and- Earnings per share (“EPS”) for the Group for the period is expected to be between 491.03 cents and 425.56 cents. This is between 25% and 35% lower than the 654.7 cents reported for the comparative period.
  • The Zimbabwe Dollar has returned, a decade after it became worthless.“The central bank said that effective immediately, currencies including the U.S. dollar and the South African rand, in use since 2009, will no longer be accepted as legal tender,” says Bloomberg.”A local quasi currency known as bond notes, which was introduced in 2016 but can’t trade outside the country, and their electronic equivalent, the RTGS dollar, will now be known as the Zimbabwe dollar.”
  • On Monday, R14.26 would buy you one US dollar, R18.29 would buy you a pound, while the rand was trading at about R16.37 to the euro.