KPMG SA CEO, chair & 6 top staff resign over Gupta scandal
It has come under fire for the role it played in auditing a Gupta-owned company allegedly used to channel taxpayers' money to fund a wedding at Sun City in 2013.
JOHANNESBURG - Auditing firm KPMG South Africa has announced a major shake-up to its leadership structures.
The firm has come under fire for the role it played in auditing a Gupta-owned company that was allegedly used to channel taxpayers' money to fund a wedding at Sun City in 2013.
In a statement issued on Friday, KPMG said CEO Trevor Hoole has tendered his resignation and will be replaced by Nhlamu Dlomu.
In addition, Ahmed Jaffer has resigned and stepped down as chairman of the board.
“This has been a painful period and the firm has fallen short of the standards we set for ourselves, and that the public rightly expects from us,” incoming CEO Dlomu said in a statement.
“I want to apologise to the public, our people and clients for the failings that have been identified by the investigation.”
Other partners who will be leaving the firm are Mike Oddy, head of Audit and board member, Muhammad Saloojee, head of Tax and board member, Herman de Beer, former head of Forensic and board member, John Geel, head of Deal Advisory, and Mickey Bove, risk management partner for Deal Advisory.
It has also has decided to take disciplinary action seeking dismissal in relation to Jacques Wessels, the head partner on the audits of the non-listed Gupta entities.
"As has been widely reported, various allegations have been raised with respect to KPMG South Africa’s work on behalf of the Gupta family and work performed in 2014-2015 on the ‘Report on Allegations of Irregularities and Misconduct’ which KPMG South Africa produced for the South African Revenue Service (SARS report).
"As a result, KPMG International has conducted a comprehensive investigation. While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards.
"Based on the results of this investigation, significant actions have been taken and are being announced today with respect to KPMG South Africa. These actions include a series of leadership changes, changes in the governance of KPMG South Africa, and enhanced quality control procedures in certain areas."
KPMG said it would donate the R40 million it earned in fees from Gupta-controlled firms to charity and refund R23 million it earned compiling a controversial report for the South African tax service.
