KPMG South Africa clears out top leadership over Gupta scandal




JOHANNESBURG (Reuters) – Global auditor KPMG cleared out its South African leadership on Friday after damning findings of an internal investigation into work done for the Guptas, businessmen friends of President Jacob Zuma accused of improperly influencing government contracts.

KPMG’s investigation did not identify any evidence of illegal behaviour or corruption but it did find that work done for Gupta family firms “fell considerably short of KPMG’s standards”, the auditor said in a statement.

“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,” new South African CEO Nhlamu Dlomu said.

“I want to apologise to the public, our people and clients for the failings that have been identified by the investigation.”

KPMG said it would donate the 40 million rand ($3 million) it earned in fees from Gupta-controlled firms to charity and refund 23 million rand it earned compiling a controversial report for the South African tax service.

South African chief executive Trevor Hoole, chairman Ahmed Jaffer, chief operating officer Steven Louw and five senior partners all resigned.

“I absolutely understand that ultimate responsibility lies with me,” Hoole said in a statement.

KPMG is also seeking to take disciplinary action to dismiss Jacques Wessels, the lead partner on audits of Gupta-linked firms, it said. Wessels did not answer a call to his mobile phone seeking comment.

Andrew Cranston, former CEO of KPMG in Russia, has been appointed as interim chief operating officer.

KPMG is one of several global firms to be dragged into the Gupta scandal.

Zuma and the Guptas deny any wrongdoing and say they are the victims of a politically motivated witch-hunt.

The British arm of Bell Pottinger collapsed this week after the London-based global public relations agency’s clients deserted it because of a backlash over a racially charged political campaign it ran for the Guptas.

Global consultancy McKinsey is also being investigated by South Africa’s parliament over whether it knowingly let funds from state power utility Eskom be diverted to a Gupta company as a way of securing a $78 million contract to advise Eskom, the state power utility.

McKinsey is carrying out its own investigation, but has denied wrong-doing.