Monday, 18 September 2017

KPMG South Africa’s CEO resigns amid Gupta scandal.

Chief executive of KPMG’s South African arm, Trevor Hoole, has resigned with the firm’s chairman, chief operating officer and five senior partners also departing following an internal investigation into the work it carried out on behalf of the Gupta family and a report it produced for the South African Revenue Service

Due to allegations raised about KPMG South Africa’s audit work on behalf of the Gupta family and its ‘Report on Allegations of Irregularities and Misconduct’ for the South African Revenue Service, KPMG International has conducted an investigation.

KPMG said: ‘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 (…) 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.’

Trevor Hoole has tendered his resignation and stepped down as CEO, and Steven Louw has resigned as chief operating officer and country risk management partner.

Hoole said: ‘Steven and I have taken the decision to step down, in the best interests of the firm as it rebuilds and moves forward. I absolutely understand that ultimate responsibility lies with me. KPMG South Africa is a firm of hugely talented people and I believe it is the right thing for me to stand down and allow a new CEO to restore public trust and build a firm that once again sets the standard for quality and ethics.’

Nhlamu Dlomu, previously KPMG South Africa’s head for people and change, has been appointed to succeed Hoole as CEO.

In addition, Ahmed Jaffer has resigned from the firm and stepped down as chairman of the Board. The following partners will also be leaving the firm:

  • Mike Oddy, head of audit and board member;
  • Muhammad Saloojee, head of tax and board member;
  • Herman de Beer, head of forensic and board member;
  • John Geel, head of deal advisory; and
  • Mickey Bove, risk management partner for deal advisory.

KPMG South Africa has decided to take disciplinary action seeking dismissal in relation to Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.

The firm will donate the 40m rand (£2.2m) it earned in fees from Gupta to charity and refund 23m rand it earned from compiling the report for the South African Revenue Service.

Dlomu said: ‘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. I want to apologise to the public, our people and clients for the failings that have been identified by the investigation.

‘It is important to emphasise that these events do not represent KPMG, our people or the values we have adhered to over decades of committed client service. My pledge and promise to the country is that we can and will regain the public’s confidence.’

Report by Amy Austin.
Culled from CCH Daily.

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