EDINBURGH — Gupta-cursed KPMG has lost another corporate client – this time Patrice Motsepe’s African Rainbow Minerals – as it fails to shake off the mud sticking to it through its involvement in Gupta-Zuma linked financial and political activity. As auditor, KPMG stood back and watched Gupta entities suck funds out of state coffers and dodge tax. As a consultant, KPMG helped Zupta associates within the South African Revenue Service develop a report to frame former finance minister Pravin Gordhan – who stood in the way of the corrupt and captured. KPMG got rid of its senior executive team in a move designed to give the impression it has cleaned up its act. But new KPMG CEO Nhlamu Dlomu is failing to convince wider South Africa that KPMG’s dirty past is behind it and that it can be trusted to undertake a high quality audit or do any work for state entities. – Jackie Cameron
By Thulasizwe Sithole
South Africa’s first black billionaire, Patrice Motsepe, has pulled the plug on corruption-tainted auditing firm KPMG.
African Rainbow Minerals, which Motsepe chairs, has axed KPMG for ethics and governance transgressions and cites concerns of audit quality.
Global consultancy KPMG is at the centre of the state capture scandal that has engulfed South Africa and catapulted the Gupta family into the ranks of the country’s richest.
South African taxpayers have reacted with outrage over the role of KMPG, which audited Gupta-linked entities and produced a report for the South African Revenue Service (Sars) that was used to frame former finance minister Pravin Gordhan.
BizNews has reported that KPMG has an international track record of failing to signal the alarm as large-scale graft goes unchecked on their watch. For example, KPMG was FIFA auditor for 16 years, yet it did not report suspicious financial activity by the corruption-wracked football body.
Auditing experts have increasingly questioned whether KPMG audits in general can be trusted, though the various scandals have failed to negatively impact on KPMG’s standing as one of the world’s biggest audit firms.
In South Africa, a number of business leaders have taken a stand against KPMG for at the very least turning a blind eye corruption, money-laundering and tax evasion and working as a pawn for the Zupta clique.
Sygnia Group CEO Magda Wierzycka was the first to fire KPMG as auditor after it failed to adequately explain its work for Gupta entities and the Sars.
For some time, Wierzycka cut a lonely figure in the business landscape in taking a stand against KPMG. However, recently several business bosses have joined her in terminating business arrangements with KPMG.
Also joining publicly slamming KPMG, McKinsey and others for their role in raiding taxpayers’ coffers is Anglican Archbishop Thabo Makgoba.
In a strongly worded sermon, and subsequent media statement, the Archbishop said: “
“We seem to be plagued by a new generation of greedy Westerners exploiting our country, in the form of companies like McKinsey, KPMG, Bell Pottinger and the like. And what about the people we have elected into office, the corrupt South Africans who collaborate with unscrupulous foreigners, making money not out of honest work, not out of creating jobs, manufacturing goods or providing services, but by taking a cut on the side when they steer taxpayers’ money – resources which should be dedicated to improving the lives of the poor – to favoured contractors.”
KPMG SA CEO Nhlamu Dlomu is reported as saying that majority of the firm’s clients were sticking with KPMG.
— Kamogelo Lesedi (@LegendInSA) October 23, 2017
African Rainbow Minerals (ARM) terminates internal audit and other services with KPMG South Africa (KPMG)
23 October 2017
ARM has noted with concern the questions raised about KPMG’s governance and ethics compliance as well as allegations regarding the lawfulness of KPMG’s conduct.
The ethics, governance and quality of the South African auditing firms have been globally respected for many years. It is extremely important that the behaviour and conduct of our auditing firms continues to justify the respect, trust and confidence that they have earned.
Forbes profile: Patrice Motsepe
REAL TIME NET WORTH — as of 10/24/17
Forbes says the following about Africa’s first black billionaire, African Rainbow Minerals founder and chairman Patrice Motsepe.
“He launched a new private equity firm focused on investing in Africa in April 2016. Called African Rainbow Capital, it is a subsidiary of Motsepe’s Ubuntu-Botho Investments. Motsepe also has a stake in Sanlam, a listed financial services firm, and is the president and owner of the Mamelodi Sundowns Football Club. He became the first black partner at law firm Bowman Gilfillan in Johannesburg, and then started a contracting business doing mine scut work. In 1994, he bought low-producing gold mine shafts and turned them profitable. South Africa’s Black Economic Empowerment (BEE) laws, which mandate that companies be at least 26% black-owned in order to get a government mining license, benefited Motsepe. In 2013, the mining magnate was the first African to sign Bill Gates’ and Warren Buffett’s Giving Pledge, in which he promised to give at least half his fortune to charity.”