Makwetu defends decision to terminate KPMG, Nkonki contracts

Auditor-General Kimi Makwetu told MPs that the decision was not a rash one and followed several meetings with the firms.

FILE: Auditor-General Kimi Makwetu. Picture: GCIS

CAPE TOWN – Auditor-General Kimi Makwetu has defended his decision to terminate the contracts of auditing firms KPMG and Nkonki Inc.

He says it was necessary to protect the independence and credibility of his office.

He’s told MPs that the decision was not a rash one and followed several meetings with the firms.

Makwetu says the auditors will be allowed to continue with audits that are already far advanced and due to be signed-off by the end July.

The Auditor-General’s office contracts the services of 90 private audit firms at a cost of around R450 million.

Makwetu says that KPMG was given seven months’ grace to internally investigate its practices but management could not say when the probe will be finalised.

He says the VBS Mutual Bank matter, which again cast KPMG in a negative light, reaffirmed his decision to sever ties with the firm.

In the case of Nkonki Inc, he says that the firm’s inability to provide details about its shareholding, is problematic.

"Decisions on issues that emerged at different times but the risks are enormous to us. The independence of the AG’s office is sacrosanct."

Makwetu says that the decision to cancel the audit contracts is in no way a reflection on the professionalism of the employees of the affected firms.