EDINBURGH — KPMG bosses have not yet grasped that the organisation’s entire culture is corrupt and requires an overhaul. In an article on the Accountancy Age website, KPMG CEO Nhlamulo Dlomu is painted as the CEO who presided over KPMG as its South African employees got their hands dirty. But Dlomu was only installed after KPMG clients started dumping the company for its role in the Gupta-inspired state capture scandal. As Economia reports: The firm has been haemorrhaging clients since the news of its uncomfortable relationship with the Gupta family became apparent. As a result, in June KPMG SA was forced to cut 400 jobs and close a number of regional offices. – Jackie Cameron
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By Thulasizwe Sithole
KPMG appears to have successfully laundered its reputation in the UK as an enabler of graft in South Africa, by deftly passing the buck to its new CEO Nhlamulo Dlomu for losing clients. Dlomu was brought in to salvage the KPMG reputation after KPMG excised former CEO Trevor Hoole and his henchmen who were shown to have helped the Gupta family grab state funds and dodge tax.
On the Accountancy Age website, KPMG South Africa is painted as being on track to recovery through replacing Dlomu.
“It is hoped that hiring ex-PwC joint deputy chief executive, Ignatius Sehoole, will help the firm get back on track after a flurry of scandals this year,” writes Lucy Skoulding.
Former executive president of the South African Institute of Chartered Accountants, Ignatius Sehoole, will replace current CEO Nhlamulo Dlomu in May, she notes.
“With the new hire, KPMG South Africa hopes to rebuild its reputation following a number of corruption scandals. These included accusations that KPMG South Africa were caught up in a corruption scandal surrounding the powerful Gupta family.
“The firm was accused of facilitating the Gupta family in tax evasion and corruption and while KPMG denies wrongdoing, it did admit at the time to missing red flags in the family’s accounts. At least eight senior employees resigned including the CEO Trevor Hoole.
“As if this wasn’t enough, earlier in 2018 it came to light that KPMG South Africa may also have been involved in scandal at VBS Mutual Bank.
“As it was about to collapse, it was discovered that nearly R2bn ($137m) had been siphoned out of the bank due to corrupt activities at the lender.”
Accountancy Age quotes Sehoole telling the Financial Times: “My priority at KPMG will be to continue to restore client confidence and again make KPMG a place where the best people work.
“Under Dlomu, the South Africa branch of the firm suffered incidents which harmed its reputation and caused floods of clients to leave, so the hope is that Sehoole will offer a fresh start.
“Dlomu will step down and, in the interim before Sehoole joins next May, Professor Wiseman Nkuhlu will continue as the executive chairman and will then go back to the role of non-executive chairman next year,” it continues.
Nkuhlu is reported as telling City AM: “While KMPG South Africa has changed substantially over the past year, the challenges facing both KPMG and the profession have intensified.
“With this in mind, the board felt it was important to appoint an external candidate to the firm with strong industry credentials.”
The incoming CEO has had a varied and successful career, says Accountancy Age. “He joins KPMG from his role as deputy chief executive officer at PwC South Africa. He has also worked in leadership roles at MTN Group and Fedics Foods.
“He served two terms, from 2000 to 2009, in the role of executive president of the South African Institute of Chartered Accountants.
“Sehoole has also joined a large number of non-executive director roles over the course of his career, including of Harith General Partners, the Pan-African Infrastructure Development Fund, Gold Fields Operations Limited, and PPC Ltd.
“He has Bachelor’s degrees from the University of South Africa, Vista University, and the University of South Africa Foundation.”
