KPMG losing staff and clients amid Gupta fallout, sources say
Dimension Data Holdings has reportedly passed an R80m auditing contract to rival EY
KPMG is continuing to lose staff and clients in SA more than a year after issuing a public apology for some of the work it did in the country, according to people familiar with the matter.
A team responsible for US cross-border transactions in Africa quit because of limited workflow, said the people, who asked not to be identified because the information isn’t public. The fall off in work and the departures are a consequence of the fallout from corruption allegations that engulfed former president Jacob Zuma and the Gupta family last year, the people said.
In addition, Dimension Data Holdings has become the latest firm to desert KPMG, passing an R80m auditing contract to rival EY, the people said. KPMG confirmed that Dimension Data changed auditors in June. Dimension Data didn’t immediately respond to a request for comment.
The latest revelations show KPMG is struggling to restore trust since being criticised last year over work done for the Gupta family, who are accused of using political connections, including Zuma, to siphon off state funds. The firm was also forced to withdraw the findings of a report it compiled for Sars that was used as evidence in a police probe against former finance minister Pravin Gordhan.
“KPMG SA has made a number of significant changes to its leadership, governance and audit quality controls and continues to work tirelessly to restore trust in the firm,” a KPMG spokesperson said by e-mail. The firm introduced a number of safeguards and is encouraged by the number of clients that continue to retain its services, the spokesperson said.
KPMG is among a number of international companies to be embroiled in allegations of corruption during Zuma’s tenure. Bain & Company has started an independent probe into its own work for Sars, while McKinsey and software firm SAP have accepted responsibility for improper work done for state-owned enterprises.
The head of KPMG’s South African office and seven other senior executives quit in September 2017 after an internal investigation found work done for the Guptas fell “considerably short” of the firm’s standards. The Guptas and Zuma deny any wrongdoing.
In June, KPMG’s South African unit said headcount slumped to 2,200 from 3,400 a year earlier, with consultations for further reductions under way. Lost clients this year include Barclays Africa Group and the auditor-general.
The KPMG spokesperson said that the work previously done by the US cross-border-transactions team will be carried out by partners from KPMG’s global US capital markets group based in New York or London.