Business News

Audit firm KPMG clears out South Africa bosses over Gupta scandal

Global audit firm KPMG said work done for Gupta family fell short of its standards. [Photo: Courtesy]

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’s investigation did not identify any evidence of illegal behaviour or corruption but it did find that work done for Gupta family firms “fell considerably short of KPMG’s standards”, the auditor said in a statement.

“This has been a painful period and the firm has fallen short of the standards we set for ourselves, and that the public rightly expects from us,” said new South African Chief Executive Nhlamu Dlomu.

“I want to apologise to the public, our people and clients for the failings that have been identified by the investigation.”

KPMG said it would donate the 40 million rand (Sh310 million) it earned in fees from Gupta-controlled firms to charity and refund 23 million rand (Sh179 million) it earned compiling a controversial report for the South African tax service.

ALSO READ: South Africa's Sisulu says ANC must return to its roots, fight graft

South African chief executive Trevor Hoole, Chairman Ahmed Jaffer, chief operating officer Steven Louw and five senior partners all resigned.

“I absolutely understand that ultimate responsibility lies with me,” Mr Hoole said in a statement. KPMG is also seeking to take disciplinary action to dismiss Jacques Wessels, the lead partner on audits of Gupta-linked firms, it said. Wessels did not answer a call to his mobile phone seeking comment.

Andrew Cranston, former CEO of KPMG in Russia, has been appointed as interim chief operating officer.

KPMG is one of several global firms to be dragged into the Gupta scandal.

Deny wrong-doing

Zuma and the Guptas deny any wrong-doing and say they are the victims of a politically motivated witch-hunt.

The British arm of Bell Pottinger collapsed this week after the London-based global public relations agency’s clients deserted it because of a backlash over a racially charged political campaign it ran for the Guptas.

ALSO READ: IEBC assures of integrity, security of poll register

Global consultancy McKinsey is also being investigated by South Africa’s parliament over whether it knowingly let funds from state power utility Eskom be diverted to a Gupta company as a way of securing a $78 million (Sh608 million) contract to advise Eskom, the state power utility.

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

Get the top stories delivered to your inbox every day