KPMG South Africa CEO Trevor Hoole and COO Steven Louw along with other senior executives and partners have handed their resignation as KPMG tries to survive a reputational crisis which has already claimed PR agency Bell Pottinger.
Nhlamu Dlomu has been appointed to succeed Trevor Hoole as CEO. Nhlamu was previously KPMG South Africa’s Head for People and Change. Andrew Cranston, a senior partner from the KPMG International network, has been appointed interim COO.
KPMG South Africa chairman Ahmed Jaffer has also resigned, and the following partners have been announced as leaving the firm:
- Mike Oddy, Head of Audit and Board member
- Muhammad Saloojee, Head of Tax and Board member
- Herman de Beer, Former Head of Forensic and Board member
- John Geel, Head of Deal Advisory
- Mickey Bove, Risk Management Partner for Deal Advisory.
Since last July, KPMG South Africa is under investigation by the South African regulator, the Independent Regulatory Board of Auditors (IRBA), for its 2014 audit of Linkway Trading (Pty) a company owned by the Gupta family – former clients of Bell Pottinger – who has allegedly used governments funds to pay for the wedding of one of the family members.
In parallel to this investigation and mounting pressure from civil society for corporate South Africa to urgently review business relations with the accounting firm, KPMG International launched an internal investigation of its South African firm.
“While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards,” KPMG International said in a statement.
However KPMG South Africa will take disciplinary action against Jacques Wessles, the lead partner on the audits of the non-listed Gupta entities, and will seek its dismissal.
KPMG International statement continued: “Based on the results of this investigation, significant actions have been taken and are being announced today with respect to KPMG South Africa. These actions include a series of leadership changes, changes in the governance of KPMG South Africa, and enhanced quality control procedures in certain areas.”
The full findings of KPMG International’s review of its South African firm, and the action taken as a result can be found here.