Praise for moves to dump KPMG over Gupta account
The Institute of Directors in Southern Africa’s move to suspend ‘cobranding activities’ with KPMG welcomed
The Institute of Directors in Southern Africa (IoDSA), the guardian of the King codes on corporate governance, has suspended "cobranding activities" with KPMG in what is likely to be a blow to the audit firm’s ability to comfort clients while it completes a review of the work it has done for the controversial Gupta family.
Iraj Abedian, CEO of Pan-African Investment and Research Services, welcomed the IoDSA’s move and urged corporate SA to take a firmer stance on the KPMG matter.
"In a governance sense, KPMG has done more damage to this country than Bell Pottinger. PR firms are paid to spin. The SARS report by KPMG was the basis for firing key executives in SARS," said Abedian who confirmed that he had recently resigned from the board of Munich Re because it would not fire KPMG.
The only company that has fired KPMG is Sygnia Asset Management. Deneb has said it is reviewing KPMG’s role as company auditor.
JSE-listed Imperial Holdings announced on Thursday that Raboijane (Moses) Kgosana had stepped down as chairman and member of its audit committee with immediate effect. He remained a board member.
"In light of the investigation by the audit regulator in respect of KPMG", where Kgosana was previous CE and senior partner, "he and the board believe this is the most appropriate course of action, and in line with good corporate governance until such investigation has been completed", Imperial said.
The timing of the IoDSA’s move to distance itself from KPMG appears to have been prompted by the audit firm’s long-term sponsorship of the IoDSA’s Executive Golf Day. IoDSA informed its members on Thursday that alternative sponsors for the golf day had been secured. The IoDSA would not reveal who had stepped in to fill the gap.
The institute has also suspended KPMG’s sponsorship of its audit committee forum, raising concern about the future of the forum. The forum aims to assist IoDSA members to be effective in their roles on audit committees and has been described as a very useful corporate community service.
KPMG marketing and communications executive Nqubeko Sibiya confirmed that KPMG had met the IoDSA to discuss the media allegations. "We appreciate that the IoDSA is allowing KPMG International the opportunity to complete its comprehensive internal review before they make a standing decision on cobranding," Sibiya said.
In the notice issued to its members the IoDSA said that in line with its commitment to good governance it was allowing KPMG International a fair and equitable opportunity to conduct a thorough internal investigation. "The IoDSA is also aware of the investigation by the Irba [Independent Regulatory Board for Auditors] against certain partners at KPMG."