The Save South Africa campaign, a civil society group which was actively involved in recent revelations on the PR agency Bell Pottinger, has called on corporate South Africa to urgently review business relations with KPMG.
The South African regulator, the Independent Regulatory Board for Auditors (IRBA), launched an investigation in July this year into KPMG’s 2014 audit of Linkway Trading (Pty), a company owned by the Gupta family who has allegedly used government funds to pay for the wedding of one of the family members.
But Save South Africa argued: “KPMG has provided services to the Guptas and at least 36 linked companies‚ as recently as April 2016, according to media reports, and is clearly embedded in the state capture process. During this period, several KPMG staff members were wined and dined by the family, including 2010 World Cup match tickets and invitations to the launch of The New Age and Diwali celebrations.”
Some South African companies have already cut ties with KPMG, such as Sygnia, an investment management company listed on the Johannesburg Stock Exchange with a market value of R 1.4bn (US$ 105.4m) which dropped KPMG as its external auditor in August this year following leaks revealing questionable business relations with the Gupta family.
The campaign group called on other South African companies to follow suite and review or terminate their relationships with KPMG, before concluding: “As things stand, KPMG risks becoming the Bell Pottinger of the auditing profession – and we all know what public protest did to them.”
Full statement from Save South Africa is available here.
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On 13 September, KPMG International issued the following statment: "KPMG International takes this matter incredibly seriously. We are committed to the highest standards of integrity and ethics and to acting decisively if any KPMG partner or staff member falls short of those standards. The in-depth review in South Africa, which is being led by KPMG International (KPMGI), will be concluded shortly. We fully understand the urgency for answers. We are committed to being transparent about the results of this review and assure the public, our people and our clients that the firm will do the right thing and act on the findings. We’re determined to rebuild the public’s trust in KPMG’s South African firm, and will stand behind the firm and will work with it for as long as it takes to ensure there is a full and ongoing response to the results of the review."