Picture: REUTERS/SIPHIWE SIBEKO
Picture: REUTERS/SIPHIWE SIBEKO

Telkom, SA’s largest landline operator, will not award any new business to KPMG’s local unit pending the outcome of an investigation into the firm by the Independent Regulatory Board for Auditors (Irba).

Any contracts under way with the consulting firm will be completed and their expiration dates will stand, Telkom said in an e-mail to all staff. A further decision will be made when the probe by Irba into work for the Gupta family has been concluded.

“The recent media reports surrounding KPMG SA and allegations around the conduct of some of its employees have been met with great concern,” Telkom told staff. “Telkom conducts a substantial amount of business with KPMG and has taken the events very seriously.”

Irba started its investigation after KPMG released the findings of an internal report into work done for the Guptas. The firm’s probe found that the work fell “considerably short” of its own standards. The Guptas and Zuma have denied wrongdoing, while KPMG’s investigation did not find evidence of illegal behaviour or corruption.

“We appreciate the fact that Telkom will wait until the investigation by the Irba has been concluded,” KPMG spokesperson Nqubeko Sibiya said in an e-mailed response to questions. “We ask our clients and the public to wait for the outcome of the Irba investigation and the independent inquiry.”

Standard Bank said on Friday that it would terminate KPMG’s services if the auditor did not provide “satisfactory explanations” and make clear that action had been taken to avoid repeat offences. Munich Re of Africa, Sasfin Holdings, Sygnia Asset Management and Hulisani are among companies that have already stopped using the accountancy firm. AVI said on Friday it would stop using KPMG once its 2017 financial year-end audit was completed.

The scope and estimated duration of KPMG’s independent inquiry are due to be announced on Thursday, and the findings will be made public.

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