Economy

KPMG South Africa managers resign over Gupta scandal

KPMG South Africa managers resign over Gupta scandal

Global auditor KPMG cleared out its South African leadership Friday after damning findings of an internal investigation into work done for the Guptas, business friends of President Jacob Zuma accused of improperly influencing government contracts.

KPMG however stressed that the investigation found no evidence of corruption or illegal behaviour.

"I want to apologise to the public, our people and clients for the failings that have been identified by the investigation", said KPMG's new South African CEO, Nhlamu Dlomu.

The others include consultancy firm‚ McKinsey‚ business systems company‚ SAP and disgraced United Kingdom public relations firm‚ Bell Pottinger.

"Trevor Hoole has tendered his resignation to the Board of KPMG South Africa and stepped down as CEO, and Steven Louw has resigned as Chief Operating Officer and Country Risk Management Partner".

As a form of redress, the company announced that "In addition to the R23 million fee for the SARS report referred to above, KPMG South Africa will also make a donation of R40 million into education and anti-corruption not for profit organisations".

The firm has also made a decision to take disciplinary action seeking dismissal in relation to Jacques Wessels - the lead partner on the audits of the non-listed Gupta entities.

Her appointment heralds the appointment of a new management team, which will include Andrew Cranston, a senior partner from the KPMG International network, as interim Chief Operating Officer.

"Everybody is just dumbfounded", said one employee, who asked not to be named. "But right now I don't think anybody knows what to think".

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The former finance minister went on to say the witting and over-enthusiastic collaboration of senior KPMG personnel and their collusion with nefarious characters in Sars, in fact directly contributed to "state capture".

Future SA therefore called on the South African business community to continue to review their relationship with KPMG and related activities in money laundering and tax evasion; encourage their auditors, other than KPMG, to avoid the sort of advice and activities that KPMG involved itself in; and call for an independent and public inquiry into KPMG's activities in South Africa.

The audit firm is still under investigation by South Africa's IRBA, the auditors' regulatory body.

The KPMG logo is seen at the company's head offices in Parktown, Johannesburg, South Africa, September 15, 2017.

Brothers Ajay, Atul and Rajesh Gupta have interests in computer, mining, media, travel, energy and technology and employ around 10,000 people through their company Sahara Group.

On Tuesday, the British arm of Bell Pottinger folded after clients deserted it because of a backlash over a racially charged political campaign it had run for the Guptas.

McKinsey is carrying out its own investigation, but has denied wrong-doing.

The Gupta scandals have piled pressure on Zuma and opened rifts in the African National Congress, the party that has ruled since the end of apartheid in 1994.