Africa quit over Gupta scandal

17 September, 2017, 02:35 | Author: Terri Saunders
  • KPMG gets rid of 9 executives following Gupta-linked fallout        By Thandi Skade

Global audit firm KPMG said work done for Gupta family fell short of its standards.

Global auditor KPMG cleared out its South African leadership on Friday after damning findings from an internal investigation into work done for businessmen friends of President Jacob Zuma.

Heads are rolling at KPMG South Africa upon the completion of an internal investigation into the firm's business dealings with the Guptas.

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

Nine senior executives from the auditing firm KPMG have been forced to resign in a fall-out over the company's involvement with the controversial Gupta family.

The South African arm's top management has all resigned -the chief executive, Trevor Hoole, the chairman, Ahmed Jaffer and chief operating officer Steven Louw - as well as five partners.

"Their report on the so-called "rogue unit" at Sars lent credence to fallacious stories about one of the most effective investigative units in South Africa and contributed to the capture of Sars".

"I absolutely understand that ultimate responsibility lies with me", Mr Hoole said in a statement. Mr Zuma, his son and the Guptas deny any wrongdoing.

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KPMG also plans to dismiss Jacques Wessels, the lead partner on audits of Gupta-linked firms, it said.

Future SA further called on KPMG to report all instances of money laundering, tax evasion, and infringements of South African law and regulations they had discovered in their review to law enforcement authorities and regulatory bodies as required under the law, especially the Prevention and Combatting of Corruption Act (PRECCA), the Financial Intelligence Centre Act (FICA), and the Public Finance Management Act (PFMA) and make the reports of their review public.

She said: "I want to apologise to the public, our people and clients for the failings that have been identified by the investigation". Its lightest sanction is a caution or reprimand; the heaviest would be removal from the auditors' register, which would have a devastating impact on KPMG's African business.

"Over time, the full measure of the damage caused to Sars arising from the KPMG report has manifested itself in a tarnished reputation for the institution, questionable independence, and lower levels of compliance with tax and customs law".

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.

The turmoil at KPMG follows the placing into administration of the British arm of Bell Pottinger on Tuesday, after clients deserted it because of a backlash over a racially charged political campaign it ran for the Guptas.

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

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

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