Regulator reveals KPMG waved no red flags over Guptas and VBS
Disgraced KPMG failed to file any ‘reportable irregularities’ despite R900m in untraced funds and curator’s warning of fraudulent transactions
KPMG raised no red flags with the audit regulator over VBS Mutual Bank and it did not report any unlawful practices during its decade-long audit of Gupta-family companies. Auditors are required by law to blow the whistle on "reportable irregularities", which are unlawful acts committed by management that could cause material financial loss to an entity, are fraudulent or represent a breach of fiduciary duties. They do this by filing a report with the Independent Regulatory Board for Auditors (Irba). Despite VBS’s curator being unable to confirm the existence of R900m in deposits and flagging related-party fraudulent transactions, KPMG, which signed off on VBS’s accounts for the year to March 2017, had not filed any "reportable irregularities" with Irba, the regulator confirmed on Thursday. The partner on the VBS audit, Sipho Malaba, had been suspended pending the outcome of an investigation, said KPMG. "KPMG SA was investigating the matter in full co-operation with the curator of VB...