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Wierzycka fires fresh shot at Trevor Hoole: KPMG ‘enabler of evil’ in Gordhan stitch-up?

EDINBURGH — KPMG South Africa CEO Trevor Hoole is at best a man who has looked the other way as his associates undertake work that enriches and empowers the Zupta clique transforming South Africa into a kleptocracy. The KPMG name has popped up with increasing frequency wherever there is the smell of state capture and corruption. An auditing firm, its employees went as far as watching as a Gupta entity laundered taxpayers’ funds to pay for a lavish and controversial private family wedding at Sun City. Question marks hover over a report produced by KPMG that is at the centre of a smear campaign aimed at bringing down former finance minister Pravin Gordhan, who is unashamedly opposed to state capture and fought against the Gupta-Zuma clique. Edmunde Burke famously stated: “The only thing necessary for the triumph of evil is for good men to do nothing.” As Gordhan and business leaders like Wierzycka tackle the beast head on, others – like Hoole, his team at KPMG and KPMG friends in business – dig in their heels. – Jackie Cameron

By Thulisizwe Sithole

KPMG and its CEO Trevor Hoole have established a reputation within media circles for failing to respond to questions of critical public importance. Some would argue they are arrogant in their refusal to be accountable to South African citizens for ethical and legal transgressions involving taxpayers’ funds.

It is not only journalists who do not get straightforward answers from KPMG, Trevor Hoole and team. The global consulting firm does not even make itself accountable to its clients, it seems.

This is evident as Sygnia CEO Magda Wierzycka once more took to the Twittersphere in an attempt to extract some all-important action from KPMG’s Hoole. She wants to know more about the role of KPMG in a range of scandals that have hammered business confidence and arguably played a role in the country’s credit ratings downgrades.

KPMG Trevor Hoole
Accountability gap: KPMG SA CEO Trevor Hoole is steering clear of answering tricky questions about KPMG involvement in Gupta affairs.

In particular, she wants KPMG to correct a questionable report – paid for by taxpayers – underpinning a smear campaign against former finance minister Pravin Gordhan in a battle with ‘captured’ individuals at the South African Revenue Service. Gordhan, who has been outspoken in his criticism of state capture, is half-expecting to be prosecuted in connection with the SARS battle, he recently told an international audience.

The controversial Hawks unit – also believed to be ‘captured – has denied it intends to arrest Gordhan, according to reports. However, the matter is unresolved and there are many unanswered questions to be addressed.

As Save South Africa campaign said this week, it is deeply disturbed by ongoing attempts to resuscitate trumped-up charges against former Finance Minister Pravin Gordhan. The latest example of this is the persecution of SARS whistleblower Vlok Symington, who is clearly being punished for refusing to manipulate evidence around Gordhan’s relationship with the so-called SARS Rogue Unit, it said.

Earlier this year, Wierzycka took a public stand against the role of corporates in state capture and corruption by axing KPMG as Sygnia’s auditors after Hoole failed to sufficiently explain KPMG’s work for the Gupta empire.

This week, Wierzycka called on KPMG to re-open its SARS report and correct it – which is what KPMG Trevor Hoole offered to do at a meeting with her. She added: “Stand up and do what is right.”

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I call on KPMG to reopen R23m SARS report and correct it. Trevor Hoole, you told me you offered to do that. Stand up and do what is right. https://t.co/eDvzjewEs1

— Magda Wierzycka (@Magda_Wierzycka) September 2, 2017

But Hoole is not “standing up to do do what is right”, hiding behind “client confidentiality”. When asked for comment, KPMG SA spokesperson Nqubeko Sibiya said only that “KPMG is aware of her comments. We repeat that KPMG SA is committed to working with KPMG International and the KPMG Board to seek the facts surrounding the KPMG work related to the Gupta Group and other related matters”.

He said KPMG could not comment on client work “because of legal confidentiality constraints” and, contradicting Wierzycka, said that “KPMG SA continues to engage with clients to answer any questions directly”.

Sygnia CEO Magda Wierzycka

Wierzycka told BizNews that she had not heard “a peep” from Hoole or KPMG after reminding Hoole of his commitment to her.

“In my meeting with them he told me that he offered Pravin (Gordhan) the option of reopening the report to offer all parties the opportunity to contribute to the content. He then said Pravin told him not to bother because he was dealing with more important issues. Whether that was true I have no way of judging. Given the Hawks investigation based on the SARS report, I would think there is nothing more important right now than a report which is correct as opposed to one which, by KPMG’s own admission to me, is at best incomplete and based on a one-sided version of events,” she said of Trevor Hoole.

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Keep up with the role of KPMG in state capture here:

Magda Wierzycka is the first leader in the business sector to take a firm stand against the big corporates who have benefited from state capture. Wierzycka said in a recent interview on television that she was prepared to be outspoken, even though this is not the done thing in the corporate sector, as she is fully committed to seeing a better future for South Africa. Meanwhile, KPMG leaders appear to have their proverbial heads in the sand, opting for a “silence is golden” approach to managing their reputation in this crisis

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 companyaccused of riding on the backs of welfare recipients. Now Wierzycka has taken action against Big Four accounting firm KPMG.

While South Africans react with outrage over the vast and growing body of evidence that multinationals like KPMG and McKinsey have been complicit in the Gupta state capture campaign, the leaders of these companies are sitting pretty it seems. For example, neither the police nor the Financial Intelligence Centreappear to be investigating damning allegations that KPMG was aware of tax evasion and moneylaundering by the Gupta family. What’s more, KPMG CEO Trevor Hoole and team don’t seem to think they owe South African taxpayers a detailed explanation for the involvement of KPMG in Gupta affairs.

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. Read more.

KPMG, a global big four consulting firm, has underestimated the reputational risks of turning a blind eye1 to corruption and state capture. KPMG’s reluctant apology for helping the Gupta family use state funds to pay for a lavish private wedding – and adding in a nifty tax dodge on this cash – has fallen flat. As top financial columnist Ann Crotty notes in the Financial Mail, many in the corporate world are unimpressed with the way KPMG boss Trevor Hoole and his team have handled explosive revelations of the company’s role in helping a previously poor immigrant family from India raid SA state coffers. The KPMG response speaks volumes about the organisation’s corporate ethics. Read here.

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