Hauled over the coals: A view of Optimum Mine. KPMG played a role in the acquisition of the mine and Shiva Uranium mine and to an extent, it acted for the Guptas in the VR Laser matter. Picture: SUPPLIED
Hauled over the coals: A view of Optimum Mine. KPMG played a role in the acquisition of the mine and Shiva Uranium mine and to an extent, it acted for the Guptas in the VR Laser matter. Picture: SUPPLIED

KPMG’s fingerprints are all over the Gupta empire and its controversial deals dating as far back as 2008, Business Day can reveal, as an industry digs into the firm’s involvement with the family.

KPMG’s involvement in the auditing of Linkway Trading, allegedly used to channel R30m of taxpayers’ money to fund the infamous 2013 Sun City wedding, is the subject of an inquiry by the Independent Regulatory Board for Auditors (Irba).

KPMG has promised to do a "comprehensive" review of its work related to the Guptas.

The auditing firm also gave advice on investments and forming companies in Dubai, conducted a due diligence on UBank — which the Guptas wanted to buy — and provided a tax opinion and audit of VR Laser Services.

This is revealed in leaked e-mails between the Guptas and their associates. They show the extent to which KPMG provided services to the family and at least 36 linked companies, at least until April 2016, when its South African CEO, Trevor Hoole, announced the termination of services to the Guptas for "association risk".

Following revelations stemming from the leaked e-mails, Hoole announced that KPMG would conduct an internal review of work performed for Gupta-linked companies.

The review, which is being conducted by KPMG’s international company, will have to look at a lot more than what has been publicly revealed so far in the leaked Gupta e-mails. The e-mails show that KPMG was involved in providing a wide range of auditing, financial and other advisory services.

During the provision of services to the Guptas, several KPMG staff members received potentially questionable invitations to several events hosted by the family.

The events included 2010 soccer World Cup matches and invitations to the launch of The New Age, as well as Diwali celebrations.

Communications between KPMG staff and the Guptas and their representatives sometimes appear to go beyond professional auditing and financial services; some suggest close familiarity.

The Gupta family has been implicated in numerous "state capture" allegations, most notably those associated with the state-owned enterprises Eskom, Denel and Transnet as well as a dairy project in the Free State.

KPMG played a role in the Guptas’s acquisition of Optimum Coal mine and Shiva Uranium mine and to an extent it acted for the Guptas in the VRLaser matter.

Sygnia CE Magda Wierzycka, said KPMG had to decide to what extent it wanted to redeem its reputation in the court of public opinion and whether that mattered to it. "If it does, the scope [of the review] must be exhaustive and the results transparent, including an apology," Wierzycka said.

KPMG said the scale and scope of the review was "comprehensive and covers all aspects of our work" related to the Guptas. KPMG said that it would release the findings "within legal parameters".

Irba’s complaint is focused on the audit of Linkway Trading, but it may expand its investigation scope if necessary, it said. If found guilty of wrongdoing, Irba may issue a caution or reprimand to KPMG, a R200,000 fine per charge, suspend KPMG’s auditor’s rights to practise for a period or remove its auditors from SA’s register of registered auditors.

Irba said it was in the public interest for KPMG to make its review findings public.


Please sign in or register to comment.