Bidcorp has no qualms in giving KPMG the nod
Bidcorp has a market capitalisation of R104bn and operates in the UK, Europe, Australasia and a number of emerging markets, including SA
Multinational food-service group Bidcorp has reappointed KPMG as its independent external auditor, despite a number of other companies dropping the troubled audit and advisory firm’s services.
Bidcorp has a market capitalisation of R104bn and operates in the UK, Europe, Australasia and a number of emerging markets, including SA.
KPMG, under a cloud after allegations of state capture and unethical conduct, has been providing audit services to Bidcorp for two years.
KPMG SA has lost clients equating to 5% of its audit revenue in the past few months. According to KPMG’s annual review, the audit revenue for Europe, Middle East and Africa region was $4.13bn in 2016.
At Bidcorp’s annual general meeting in Johannesburg on Thursday, nonexecutive chairman Brian Joffe said shareholders had voted to keep the firm on because remedial action had been and continued to be undertaken to strengthen the governance of the firm and its audit quality process, with the intention of restoring its image.
"The obligation of [the] management is to let shareholders decide," he said.
The company said it had been reassured that KPMG’s newly appointed management team was committed to the implementation of an independent investigation into the matters raised and will further take any such remedial action that may be prescribed. Just more than 92% of Bidcorp’s shareholders, representing 74% of the total issued shares, voted in favour of retaining the audit firm, while 7.92% voted against and 0.26% abstained.
One shareholder told the Bidcorp management team that continuing in a relationship with KPMG was tantamount to supporting corruption and the state capture agenda.
KPMG’s conduct is being investigated by accounting and audit authorities including the South African Institute of Chartered Accountants.
The Independent Regulatory Board for Auditors has also launched an investigation into former KPMG lead partner Jacques Wessels after KPMG had said in September it was seeking disciplinary action against him.
KPMG has terminated contracts with clients that it considers to be high-risk, including all politically affiliated entities.