Company In Crisis

KPMG SA has withdrawn a flawed report that let to Pravin Gordhan losing his job. What did they do wrong – and what now?

- Richard Van Rensburg & Jane Vorster

EVEN if you’ve never needed to employ its services or set foot inside its imposing offices, you’ll have heard the name: KPMG – one of the big four auditing firms in the country and one of the most solid, respectable institutions too.

At least, that was how things stood until recently. But these days KPMG is on everyone’s lips for all the wrong reasons.

The global company made international headlines after bombshell revelations its South African division wrote a dodgy report that gave President Jacob Zuma the ammunition he needed to justify his shock firing of former finance minister Pravin Gordhan earlier this year.

It ’s also been forced to concede its SA division should have resigned as auditors for the Gupta companies much sooner and that the work the company did for them fell considerably short of auditing standards.

According to reports KPMG SA turned a blind eye as the powerful Gupta family wrote off bills to the tune of R30 million for their niece’s infamous Sun City wedding as “business expenses”.

All this came to light in the wake of the GuptaLeaks emails, the treasure trove of correspondence that shines a spotlight on the controversial family’s government and business dealings.

Following the release of the incriminating mails KPMG was forced to conduct an internal investigation and come clean. But now with its reputation in tatters and major-league clients jumping ship the question is: how did such a respected company get itself in such a mess? And is there any way it can redeem itself?

SO WHAT DID KPMG DO?

Shortly after his appointment by Zuma as commissioner of Sars, Tom Moyane hired K P M G SA in December 2014 to do a thorough investigation into alleged irregularities at the revenue service – specifically the existence of a “rogue unit” (YOU, 8 September 2016).