‘Donate Gupta money’
The asset manager that fired KPMG as its auditor last month says the company has finally done the right thing by suspending employees to conduct a probe.
Sygnia Asset Management fired KPMG over its alleged role in state capture as well as unhappiness about KPMG’s probe of allegations of a “rogue unit” at the SA Revenue Service.
Sygnia CEO Magda Wierzycka told City Press on Friday: “From the press release, it looks like KPMG International (KPMGI) is now involved and the pressure might have come from them, as well as from numerous corporate clients who finally started asking the right questions.
"I am, however, surprised that it took KPMG SA so long to arrive at the right conclusion.
“I strongly believe that, as a gesture of goodwill towards the citizens of South Africa, KPMG should donate all the fees they made from the numerous Gupta companies they provided services to, to charities and to civil rights organisations fighting corruption.”
Without divulging names, she told City Press that at least six large companies using KPMG had contacted her after her company dropped the audit firm.
Not everyone was happy.
Some of Sygnia’s own clients use KPMG as their auditors and have expressed unhappiness with Wierzycka’s actions because it puts them in a difficult spot.
Iraj Abedian, Pan-African Investment and Research chief economist, said in a post on Twitter that 70 private sector companies that have dealings with KPMG were effectively condoning KPMG’s role in the state capture looting. “Outright wrong!” he exclaimed.
KPMG’s actions are “too little too late”, said Wierzycka.
“If you look at SAP, they did precisely what you should – they suspended everyone.”
Sygnia is tendering for a new auditor and two of the so-called Big Four have expressed interest, she said.
One of them did not want to get involved, she said.
“There is blood in the water now.”
KPMG SA has suspended one audit partner and “relieved” two executives from their positions as the company probes the work it did for Gupta companies.
The audit company said it had suspended the lead audit engagement partner engaged with the Gupta businesses, but did not name the partner.
Two KPMG partners had been “relieved of their board and executive positions” pending the outcome of the comprehensive reviews.
The firm again did not name the two people involved.
Trevor Hoole, KPMG SA CEO, said in a statement on Friday that the group had taken allegations related to its work with Gupta-related companies “extremely seriously”.
“The KPMG SA board immediately initiated a comprehensive review,” Hoole said.
Kulani Chauke, an SA Institute of Chartered Accountants spokesperson, of which KPMG is a member, declined to comment on Hoole’s statement.
“Where any problems or issues are found, those KPMG individuals responsible will be held accountable,” Hoole said.
“We also note that KPMG has received criticism regarding the ‘SA Revenue Service report’.
"The review being conducted by KPMGI will be extended to include KPMG’s role in this report.
“It is now clear that, based on publicly available information, KPMG should have resigned earlier than March 2016 and should have stopped working for the Gupta companies sooner than we did,” Hoole said.
KPMG accepted that four of its partners should not have attended the Gupta wedding in 2013, Hoole said.
“Mistakes have been made and painful lessons learnt. We commit to take every action necessary to apply these learnings,” Hoole said.
The Independent Regulatory Board for Auditors has been probing KPMG’s involvement in the Guptas’ Oakbay Group since June.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.