KPMG begs SA for forgiveness. Has it REALLY changed its spots?

EDINBURGH — KPMG South Africa has apologised for aiding and abetting the corrupt in the country’s state capture scandal. Citizens will be wondering whether it has really transformed as it claims it has. KPMG bosses smugly sat back when it emerged that KPMG executives attended a controversial Gupta wedding in 2013 and watched as the Gupta and Zuma families and friends siphoned money out of state entities and dodged tax. Sygnia group founder Magda Wierzycka cut a lonely figure when she took on KPMG in public and, in 2017, cut the company loose as Sygnia auditor when its top team failed to come clean on the company’s dirty deeds. Very slowly, other SA companies joined suit in severing relationships with the Big Four audit firm. Now that KPMG is taking financial strain, its top team would like South Africa’s sympathy. Following the lead of McKinsey and Bain & Co, KPMG bosses have decided to apologise for misdeeds. – Jackie Cameron

By Antony Sguazzin

(Bloomberg) – KPMG LLP, the auditor that shed clients and staff after scandals in South Africa, apologises for its “misdeeds” and wants a second chance to reestablish its business in the country, Chairman Wiseman Nkuhlu said.

KPMG South Africa Wiseman Nkuhlu
Incoming chairperson of KPMG South Africa Wiseman Nkuhlu

The firm, one of the so-called big four global auditing companies, confessed to publishing a misleading report on the South African Revenue Service that led to a police probe of a former finance minister, did work for the Gupta family who have been implicated in corruption scandals linked to former president Jacob Zuma, and acted as an auditor for a bank that collapsed due to alleged fraud. Its eight top staff resigned in September 2017, some of the biggest companies in South Africa have replaced it as their auditors and in June it said its workforce had shrunk to 2,200 from 3,400.

“KPMG had made a lot of serious mistakes and lost the trust of the public and clients,” Nkuhlu said in an advertisement placed in South Africa’s Sunday Times newspaper. “We had lost sight of our responsibility to serve the broader public interest.”

The company is one of a number of international firms that have apologised for their conduct during the nine-year rule of Zuma, which ended in February, during which time corruption at state companies became endemic. Bain & Co. has started an independent probe into its own work for South Africa’s tax service, while McKinsey & Co. and SAP SE have accepted responsibility for improper work done for state-owned companies.

“We know we made mistakes and we will accept responsibility, as appropriate, for our misdeeds,” Nkuhlu said. “In return, I would like to make an appeal to South Africa business, government and the public. An appeal for your recognition that KPMG South Africa is today a very different business to what it was 18 months ago.”

The company, which has lost clients including Barclays Africa Group Ltd. and Dimension Data Plc, is seeking to win back trust, he said.

We “appeal for your permission, for KPMG South Africa and the thousands of South Africans who work for it, to continue to play a positive role in the business community and the life of the nation,” he said.