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EDINBURGH — Magda Wierzycka is one of South Africa’s most successful female entrepreneurs, and arguably its most influential in the financial services sector. Wierzycka has also become one of the most outspoken South African CEOs on the subject of corruption and the abuse of the disadvantaged. Earlier this year, her criticism of asset management rival Allan Gray ultimately led to a change in the boardroom of Net1 – a Nasdaq-listed company accused of riding on the backs of welfare recipients. Now Wierzycka is cracking her whip around Big Four accounting firm KPMG. The multinational KPMG has been linked to a moneylaundering scandal in which South African taxpayers’ funds were used to pay for an extravagant wedding hosted by the controversial Gupta family. A nifty tax dodge was also thrown into the mix. KPMG is the auditor to Sygnia, the company that Wierzycka founded and took to a Johannesburg stock exchange listing. KPMG has failed to answer uncomfortable questions put to it by journalists. Wierzycka has promised that if KPMG doesn’t give her the answers, she will fire the firm – fast! Wierzycka has already put her money where her mouth is on fighting corruption by donating funds to independent journalists who are investigating state capture. – Jackie Cameron
Asset management entrepreneur Magda Wierzycka has raised her head above the parapet again to take a strong stand against corrupt corporates – this time promising to fire KPMG if it doesn’t come clean on its role in the Gupta moneylaundering show.
AmaBhungane journalists working on the #GuptaLeaks have pieced together evidence linking senior KPMG figures to the Gupta family. They have detailed how KPMG, Gupta entity auditor, watched as the Guptas laundered tax-payers’ money to pay for an extravagant Gupta family wedding at Sun City and then helped the Guptas dodge tax on the proceeds.
Wierzycka is the founder of the Sygnia group, a fast-growing financial services group that offers index-tracking funds in South Africa. Earlier this year she took on the country’s largest private asset manager, Allan Gray, for not doing enough to nip irregularities in the bud at Net1, a company in Allan Gray portfolios.
In an interview with CNBC Africa, which describes her as one of South Africa’s richest women, Wierzycka has made it clear that she is going to take a firm stand against KPMG if it does not explain to her satisfaction the full details of its involvement with Gupta entities.
KPMG is Sygnia’s auditor. A scan of the amaBhungane donors indicates that Wierzycka has supported the independent investigative team with sponsorship.
In an interview with Bruce Whitfield, Wierzycka shares why she has made it a personal mission to fight corruption in South Africa.
All South Africans should take the corruption fight seriously – Wierzycka
“I’m taking this whole issue of corruption in South Africa very personally. I was a refugee once. I don’t want to be a refugee from yet another country, so I will fight for a free and fair South Africa.
“I have this growing perception that there is a handful of people who are holding 55m South Africans hostage. If I can contribute by being outspoken and critical of what I see around me, then I will be – even if it is not the done thing in the corporate sector,” she said.
The Guptas “don’t do anything, they don’t really provide valuable services” so they have always positioned themselves as rent-seekers, the middle men between government contracts and private sector, the Sygnia CEO observed.
For every rigged government tender there is a private participant “which is very disturbing”. This is why Wierzycka has chosen not to join any business association where potentially there are companies that are compromised by having paid bribes to the Guptas to secure government contracts.
“The Guptas have never truly provided a service in South African in any meaningful way,” she said.
KPMG: Front-row to the Gupta moneylaundering show
KPMG came to prominence when it was the first of the big financial services companies to say “we don’t want to do business with the Guptas any more”, pointed out Whitfield.
Big banks then followed suit. KPMG should be given credit for that, said Whitfield, though he noted that KPMG should be strongly criticised for failing to report irregularities to its own regulator and for leaving the issues as long as it did.
KPMG is auditor of Sygnia, Wierzycka highlighted.
“The problem I had with KPMG is obviously these are the auditors who signed off on the use of South African taxpayers’ money to pay for a Gupta wedding.”
That money was then laundered through the Dubai “washing machine” and there are “wonderful graphs and charts” circulating to show how that took place, she reflected.
Wierzycka told Whitfield that KPMG needs to ask the following questions:
- How is it one of the Big Four audit firms did not pick up a big moneylaundering exercise?
- What sort of audit does KPMG perform if it cannot pick that up?
- Was it because the CEO (Moses Kgosana) at the time was a guest at the Gupta wedding?
- Was it because they were paid astronomical fees to look the other way?
“I’m going to look for all the answers” and will “absolutely and immediately” axe KPMG if she is not satisfied, she told Whitfield.
Wierzycka said South Africans will fight for their rights, even if it means taking to the streets again.South Africa is not another Zimbabwe; look instead at Brazil where the wheels of justice have finally turned, she added.
- JSE-listed Sygnia has about R160bn in assets under management and administration.
KPMG: Laundry director in the big Dubai moneylaundering machine? Read about its role here:
Moses Kgosana was about to take the chair at Alexander Forbes Group Holdings when his name emerged in secret emails leaked from the heart of the Gupta family empire. He has been linked to an accounting manoeuvre that facilitated state payment for an extravagant private event. Read more.
Auditing firm KPMG has been thrust into the limelight for its relationship with the Gupta family – Indian immigrants at the centre of a state capture scandal that has engulfed South Africa.
KPMG helped the Gupta family divert taxpayers’ funds to pay for an extravagant family wedding at Sun City and went one step further in ripping off taxpayers by helping the family to avoid paying tax on the funds.
The other stories you might have missed about the big companies involved in the state capture scandal:
The McKinsey name was highlighted in an investigation into corrupt deals involving the controversial Gupta-linked Trillian Capital Partners. At the weekend, it emerged that McKinsey has suspended one individual. It’s a case of too little, too late for many South Africans who ponder why McKinsey and other companies have taken so long to take a stand against the corrupt and captured within their own ranks.
The #GuptaLeaks reveal that the Zupta account has been so lucrative for Bell Pottinger that it sent an invoice for just under £350 000 (about R5,5m), for a four-day trip that included a suggested speech for Collen Maine of the ANC Youth League and a statement for the MK Veterans Association. Read more.
One of the world’s biggest business software companies SAP may find itself in hot water with German and US regulators after being embroiled in a massive Gupta kickback deal.Investigative journalism unit, AmaBhungane, released a bombshell report on Tuesday that details how SAP, in August 2015, agreed to pay a 10% “sales commission” to a Gupta-linked company in return for Transnet deals. Read more.
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