Business Leadership SA suspends KPMG
The Business Leadership SA (BLSA) board has suspended KPMG's membership, pending the probe into the firm's conduct related to the work it did for the Guptas and the South African Revenue Service (SARS) report on the so-called rogue unit.
The Independent Regulatory Board for Auditors (IRBA) is conducting its own independent investigation of KPMG.
In addition to this, the South African Institute of Chartered Accounts (Saica), the industry body for the profession, will on Friday make announcements regarding its own investigation into its members employed at KPMG.
BLSA said it wanted emphasise that its members remained unfettered in their individual engagements with KPMG.
While BLSA recognised the "considerable steps" announced by KPMG to change its leadership and commence a process of cultural change, it said: "It cannot, however, look past the gravity of their conduct which is completely inconsistent with the values of BLSA, contained in our Integrity pledge. We must live by example, and that starts with our own members."
It said that while KPMG had let itself down in SA, BLSA recognised that the bulk of KPMG staff were committed, honourable and diligent individuals who were not implicated in state capture allegations. They and the firm remain an asset to the South African economy.
“We are deeply concerned by the unethical and unprofessional conduct that KPMG engaged in in SA. The firm became party to the project of 'state capture' which has harmed our country, victimised certain individuals and damaged the reputation of business," BLSA CE Bonang Mohale said.
BLSA believed the situation called for an expeditiously managed independent inquiry, and full disclosure on the part of KPMG, to uncover the extent and role of individuals involved in the state capture project. Anyone found to be in breach of the law should be prosecuted.
"Corruption is unacceptable wherever it shows its face, and business should never be party to the widespread corruption in all levels of government and in state-owned enterprises. KPMG will do society a considerable service if it assists in this process through full participation in an independent inquiry," Mohale said.
Pravin Gordhan, who was fired from his post as finance minister partly as a result of KPMG’s SARS report and who saw many of his former SARS colleagues dismissed because of it, rejected the apology made by KPMG International chairman John Veihmeyer last week, when he withdrew the 2015 report, and threatened legal action.
Gordhan said KPMG’s "regret" did not come close to acknowledging the damage the report had done to SARS and the livelihoods of honest and professional public servants.
In a meeting with KPMG on Thursday, Gordhan and his former deputy, Mcebisi Jonas, insisted on a full and proper disclosure of the role of various parties in state capture and the manner in which KPMG staff seemed to have colluded in this.
This included the complete disregard shown by KPMG management, they said.