KPMG has South Africa contracts cancelled following spate of scandals
South Africa’s auditor general has cancelled all contracts with big four accounting firm KPMG after a series of major scandals.
The audit giant had been implicated in the scandal that led to the collapse of storied London public relations firm Bell Pottinger in September.
Read more: Demise of a PR giant: The inside story of Bell Pottinger’s collapse
South Africa’s auditor general Kimi Makwetu announced the move today.
“Recent media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners are some of the reasons that prompted the decision to withdraw all KPMG audit mandates with immediate effect,” he said.
Last week KPMG partners Sipho Malaba and Dumi Tshuma resigned after facing disciplinary charges over failure to disclose financial interests in VBS Mutual Bank.
This comes at a time when KPMG is under considerable pressure in South Africa after it found work done for the powerful Gupta family, close allies of former president Jacob Zuma “fell considerably short of its standards”.
London PR firm Bell Pottinger collapsed last year after revelations that it had acted for the Gupta’s on a racially divisive campaign.
Read more: McKinsey, SAP & KPMG accused of criminal conduct by South African regulator
KPMG CEO Nhlamu Dlomu said: “Every client is important to us and the announcement by the auditor general has come at a time when we are taking significant steps towards building a firm that is in tune with the needs of our country. It is very much our hope that this announcement will prove to only be a temporary break in the relationship. We will – in the months ahead – keep the AG closely apprised of all the changes we are making to further embed our quality and integrity in all that we do. We will work closely with the AG to minimise disruption.”
In January KPMG, consultancy firm McKinsey and software group SAP were accused of criminal conduct by South Africa’s companies regulator, the Companies and Intellectual Property Commission (CIPC).
A spokesperson for the CIPC said that criminal complaints against the three companies were filed with South African police towards the end of last year, for contravention of the country’s Companies Act.