EDINBURGH — For a time, KPMG shrugged off concerns that was intertwined with the corrupt and the captured. KPMG has been at the centre of South Africa’s biggest political scandal, helping the Zuma family and the controversial Gupta family suck funds out of state entities. It also worked with Zuma’s associates to work corruption-busters and former minister of finance Pravin Gordhan out of their posts. KPMG’s top layer of executives resigned as the public outcry over the Big Four consultancy grew, but for many onlookers this was seen as not enough to right the wrongs. KPMG has its proverbial fingers in juicy pies across the state sector and big business and there are concerns that their audits can’t possibly be independent because they receive lucrative fees from the same companies they are supposed to check. This week, it emerged that KPMG has decided to scrutinise every employee regularly with a view to excising the rot. That’s a step in the right direction, even though it comes only after its benefactors – the Gupta, Zuma families and associates – are no longer in place to keep greasing palms. – Jackie Cameron
KPMG South Africa, which has faced scrutiny for its audit work on failed VBS Mutual Bank and companies linked to the politically connected Gupta family, said all staff face background checks every two years to try improve public trust in the firm.
“The vetting is to be done by an external, independent party,” Wiseman Nkuhlu, chairman of KPMG, told reporters in Johannesburg on Sunday. The firm will also extend a review of its past work to stretch back 18 months and set up a hotline for employees to raise concerns about the quality of KPMG’s work, he said.
Two of the auditor’s partners, Sipho Malaba and Dumi Tshuma, resigned this month after they were faced with disciplinary charges related to work done for VBS Mutual Bank, which collapsed in March after the lender was unable to repay some of its clients’ deposits. The allegations against them included their failure to comply with the firm’s policies and procedures regarding the disclosure of relevant financial interests, KPMG South Africa said in an emailed statement on Saturday.
On the VBS work, “the disappointment and anger is palpable,” said Nhlamu Dlomu, chief executive officer of KPMG South Africa. If the two partners who quit need to be reported to the country’s authorities following the KPMG probe, the firm will take those steps, she said.
Last year, KPMG LLP’s South African unit appointed nine new executives in an attempt to restore trust in the auditing firm as clients distanced themselves over its involvement with the Gupta family. The Guptas, who have fled South Africa, are accused of using their friendship with former President Jacob Zuma to win state contracts and influence government appointments. Zuma and the Guptas have denied any wrongdoing.