KPMG chair apologises for ‘hurt and damage’ to SA institutions
But Wiseman Nkuhlu says he’s confident that the probability of another VBS happening is ‘remote’
KPMG chair Prof Wiseman Nkuhlu has penned an open letter to South Africans, apologising for the damage the auditing firm caused to some of the country’s institutions.
The company, which lost a number of high-profile clients after revelations that it was involved in state capture, has been struggling to shake off its dented image.
The situation was made worse in April when it became subject of the VBS collapse. The forensic report commissioned by the Reserve Bank showed that KPMG partner, Sipho Malaba, was among people who received “financial facilities” from VBS and gave it a clean audit opinion, despite knowing that VBS’s financial statements were materially misstated.
Nkuhlu said he realised that gaining public trust would not happen overnight.
“What happened to VBS was shameful, not least for the considerable distress caused to customers of the bank.
“So it is appropriate to repeat to fellow South Africans our apology for work that caused real hurt and damage to South African institutions and our fellow South Africans. We failed by our standards and we let the country down,” wrote Nkuhlu.
In November, Nkuhlu told Business Day that the firm had lost more than 1,000 staff members and about R1bn in annual revenue after shedding some big clients. He said after performing a review of its client book, the firm had also “deliberately” let go of few high-risk clients.
“We realised that there is a big portion of our work that is concentrated in small unlisted clients that we didn’t even earn a lot of fees from, like VBS,” said Nkuhlu at the time.
He added that given the criteria KPMG now uses to select and monitor accounts, he was confident that the probability of another VBS happening was “remote”.
Last week, KPMG also announced that it will be donating the R47m fees it earned from Gupta-related entities to civil society organisations. In his open letter, Nkuhlu said this and other acts, such as the firm’s commitment to appear before the Zondo commission into state capture and the departure of audit partners whose work was found unsatisfactory, was testimony to a change in culture at KPMG.
“We know we made mistakes and we will accept responsibility, as appropriate for our misdeeds. In return, I would like to make an appeal to South African business, government and the public: An appeal for your recognition that KPMG SA is today a very different business to what it was 18 months ago,” wrote Nkuhlu.