New KPMG South Africa chief executive Nhlamu Dlomu and head of public sector, Modise Maseng, were called to answer questions before Parliament's standing committee on public accounts. Photo: David Ritchie / ANA Pictures.

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Any criminality by KPMG employees will be reported – new CEO

PARLIAMENT, October 6 – New KPMG South Africa chief executive Nhlamu Dlomu on Thursday said should the auditing firm find any evidence of criminal wrongdoing on the part of employees it would not hesitate to act.
Dlomu was speaking to journalists shortly after she was in the hot seat in Parliament’s standing committee on public accounts (Scopa) over the company’s work done for the South African Revenue Service (Sars) and the politically connected Gupta family’s companies.
“Should KPMG find any criminal doing from any of our employees,  as a responsible employer, we would have to institute such proceedings. This is not limited to any grouping, its any of the employees who are found to be criminally liable,” said Dlomu.
Dlomu had earlier told MPs that no action had been taken against various executives who had resigned after the company admitted work done for the Gupta-owned companies “fell considerably short of KPMG’s standards”.
The company also withdrew a report it compiled for the Sars into the existence of a “rogue spy unit” on the watch of former finance minister Pravin Gordhan, saying the report contained mistakes.
Dlomu said the executives were paid severance packages, although she would not confirm how much the exit packages cost KPMG SA.
She conceded to Scopa that although the executives were not physically working, they were still on the payroll to ensure a smooth handover process.
MPs were not happy, saying they preferred to see those responsible for possibly turning a blind eye to alleged corruption in handcuffs, pushing Dlomu to make several commitments to Parliament.
This included that they would support a probe by the Independent Regulatory Board of Auditors (IRBA), providing it with outstanding documents, and another independent inquiry into the auditing firm by the South African Institute of Chartered Accountants (SAICA).
“We are committed to taking appropriate action against those individuals. We ask for a chance to act on these issues that have been raised,” Dlomu said to MPs.
On Tuesday, IRBA told Parliament’s standing committee on finance it had met with KPMG international chairman Bill Thomas and urged him to ensure full cooperation with its investigation into work KPMG SA did for the Gupta family’s business empire.
The IRBA probe at this point focused on KPMG’s role in the auditing of Linkway Trading, a company that belongs to the Gupta family, and was allegedly involved in the diversion of public funds invested into the Vrede dairy farm in the Free State to the United Arab Emirates. It also includes the fact that KPMG executives attended a Gupta family wedding at Sun City in 2014.
It is alleged that funds funnelled to the UAE were used to pay for the lavish wedding.
MPs also heard the IRBA investigation could be expanded to include the KPMG report on the so-called rogue intelligence unit set up within the Sars on Gordhan’s watch. 
The report was commissioned by Sars commissioner Tom Moyane, and has been used as the basis for unsuccessful attempts to lay criminal charges against Gordhan.
Since the news broke the company have lost clients, including Wits University and Parliament.
Asked by journalists about the scope of losses as a result of a lack of confidence in the company’s integrity, Dlomu said: “Everyone of our clients is important to us so to us the value of the loss we will calculate but the value of the relationship is what we are working on.”
The company was in constant talks with clients to provide them with reassurances, she said.

Exit packages were paid to senior KPMG South Africa managers who recently resigned in the wake of the auditing firm admitting some of its work done for the South African Revenue Service (Sars) and the politically connected Gupta family fell short of acceptable standards, MPs heard on Thursday.
Briefing Parliament’s standing committee on public accounts, KPMG SA’s new chief operating officer Nhlamu Dlomu and the company’s interim chair of the policy board, Gary Pickering, both confirmed that no action, including criminal charges, had been laid against the former top executives.
They would not disclose the size of the severance packages, citing legal issues.
When pushed about the lack of action against those responsible for the probe into the existence of a “rogue spy unit” in Sars and work done for Gupta-owned companies which the auditing firm admitted “fell considerably short of KPMG’s standards”, Dlomu said they were committed to ensuring these individuals were held accountable.
“We are committed to taking appropriate action against those individuals,” said Dlomu.
“We ask for a chance to act on these issues that have been raised.”
Dlomu was appointed chief executive following the resignation of the top leadership of the company, including chief executive Trevor Hoole, chairman Ahmed Jaffer, chief operating officer Steven Louw and five other senior partners.

 

Last month, the company said it was pursuing disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.
KPMG further said it would donate the R40 million it earned in fees from Gupta-controlled firms to charity and refund the R23 million from the controversial Sars report.
On Tuesday, the Independent Regulatory Board of Auditors (IRBA) told Parliament’s standing committee on finance it had met with KPMG international chairman Bill Thomas and urged him to ensure full cooperation with its investigation into work KPMG SA did for the Gupta family’s business empire.
The IRBA probe at this point focused on KPMG’s role in the auditing of Linkway Trading, a company that belongs to the Gupta family, and was allegedly involved in the diversion of public funds invested into the Vrede dairy farm in the

Free State to the United Arab Emirates. It also includes the fact that KPMG executives attended a Gupta family wedding at Sun City in 2014.
It is alleged that funds funnelled to the UAE were used to pay for the lavish wedding.
MPs also heard the IRBA investigation could be expanded to include the KPMG report on the so-called rogue intelligence unit set up within the Sars on the watch of former finance minister Pravin Gordhan.

 

The report was commissioned by SARS commissioner Tom Moyane, and has been used as the basis for unsuccessful attempts to lay criminal charges against Gordhan.

KPMG’s CEO “greatly disappointed” by Gupta work


– African News Agency (ANA)

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