CONFUSION OVER PROBES
KPMG inquiry: how one and one may make one
KPMG SA and Saica’s CEO do not appear to be on the same page regarding the Gupta inquiries
The independent investigation KPMG International announced into work done by KPMG SA for the Gupta family, and the Ntsebeza inquiry, commissioned by the South African Institute of Chartered Accountants (Saica), are one and the same.
Saica CEO Terence Nombembe confirmed this to journalists on Monday.
KPMG SA, however, refused to confirm whether the Ntsebeza inquiry was in fact the independent inquiry that KPMG International had promised on September 22. "The Saica terms of reference are different in part from the form of the independent inquiry called by KPMG. We are therefore considering if additional steps need to be taken in light of the statement of September 22," spokesperson Nqubeko Sibiya said.
While Sibiya welcomed Saica’s inquiry, it would appear that the Ntsebeza inquiry is far more wide-ranging than KPMG had intended an independent inquiry to be.
Announcing plans to institute an independent investigation, after an internal probe led to eight partners leaving the firm, KPMG International chairman John Veihmeyer said in September that the investigation would explore whether KPMG SA’s partners or staff were complicit in illegal activities by the Gupta family and their businesses, and whether there were any failings in a report done for the South African Revenue Service (SARS) that gave rise to the so-called "rogue unit" narrative.
The terms of the Ntsebeza inquiry, on the other hand, extend far beyond KPMG’s dealings with the Guptas and SARS. The inquiry will probe KPMG’s risk management systems for "endemic or systemic deficiencies" and examine whether the company’s internal policies align with Saica’s code of conduct.
This was the first time in at least two decades that Saica had called an independent inquiry of this nature, said Nombembe. The last time it had commissioned an investigation into its members was after the collapse of the Masterbond group of companies in 1991.
The Ntsebeza inquiry is due to make recommendations by April 30, on the basis of which Saica will sanction members.
Meanwhile, chemicals group AECI on Monday said it had decided to adopt early mandatory audit firm rotation, which is effective only in 2023, and that KPMG, its external auditor for 93 years, would not be considered for reappointment in 2018.