Hulisani joins Sasfin in jumping KPMG’s sinking ship
The taint of being associated with the Guptas is taking its toll on KPMG as two more companies distance themselves from one of the world’s ‘big four’ auditors
South African energy investment company Hulisani plans to drop KPMG as its auditor, citing reputational risk, its CEO said on Tuesday.
“The risk committee looked at various factors, including what’s in the media now about KPMG and the Guptas, and we concluded that it would be in best interests of the company to change auditors,” Marubini Raphulu told Reuters.
KPMG cleared out its South African leadership en masse on Friday after a damning internal investigation into work the firm did for the Guptas, who are close friends of President Jacob Zuma. Earlier, brokerage house Sasfin Holdings fired KPMG as its auditor, citing “well-publicised concerns” about the accounting firm, which is struggling to keep clients after flaws in its work for the Guptas.
“In view of the well-publicised concerns recently raised with regard to KPMG, as well as Sasfin’s commitment to good governance in respect of auditor independence and auditor tenure, Sasfin has decided to put its audit out to tender,” Sasfin said in a statement.
Sasfin’s decision comes as several South African blue-chips, including Barclays Africa and Old Mutual, say they are considering whether to cut ties with one the biggest and most influential names in accounting.
KPMG is the third global firm to face questions about its work for the Indian-born Gupta brothers, who have has been accused by the Public Protector of unduly influencing the awarding of government contracts.
Consultant firm McKinsey is being investigated by SA’s parliamentary committee on public enterprises, while the British business of public relations agency Bell Pottinger collapsed last week following a scandal over a racially-charged political campaign it ran in SA.
The Guptas and Zuma deny wrongdoing and say they are victims of a politically motivated witch-hunt. The Guptas and their companies have not been charged with any crime.
With TJ Strydom