For about half a year now, things haven’t been looking all that good for KPMG.
The mess began last September when the international auditing firm admitted to “failing to apply its own risk management and quality controls” when it was linked to the Guptas, and we asked if this meant that KPMG could go down the same road as the UK’s Bell Pottinger.
Well, fast forward to April 15, and it appears the answer is yes, KPMG does look like its joining Bell Pottinger on the Gutpa-sullied list of companies.
So much so that the company was forced to release a plan to “accelerate change and rebuild public trust” in its South African branch, reports Quartz:
This was a day after the latest revelation that two partners had resigned when faced with disciplinary charges for their involvement in signing off on the books of the embattled VBS Bank.
The bank, best known for giving former president Jacob Zuma a mortgage for his Nkandla compound, is now under curatorship after the Reserve Bank found that 900 million rand of 2.9 billion rand (about $75 million of $240 million) in deposits could not be confirmed.
A closer examination found that the bank may only have 24 million rand in liquid assets and is under investigation for tapping into the bank’s funds to enrich individuals and companies. The KPMG partners also allegedly received loans from the bank itself.
Executive director, Nhlamulo Dlomu, put it bluntly:
“This has been a very disappointing episode for KPMG.”
However, it didn’t take long for things to get worse.
On Tuesday, April 17, KPMG South Africa lost one of their biggest clients, the South African government. The decision was announced by SA’s Auditor-General, Kimi Makwetu, who said the decision to terminate all contracts with KPMG would include work at every level of government.
That must have hurt.
Following that, one of South Africa’s biggest banks, Nedbank, also announced that it will be reviewing its relationship with KPMG:
Last year, several listed companies cut ties with KPMG after it was revealed the firm had provided auditing and advisory services for the Gupta family and their various businesses. One of those was for a company called Linkway Trading, which was allegedly used to channel taxpayer money to pay for a lavish wedding.
Nothing like a little karma for dealing with dirt, hey?
Oh, and the reason their Foreshore building has yet to be completed? Word is the contractor has run out of money.
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