Private sector firm drops KPMG for alleged role in state capture
JSE-listed financial services group Sygnia has dropped the services of auditing firm KPMG due to its alleged role in state capture.
KPMG is being investigated by the Independent Regulatory Board for Auditors (IRBA) over its role in the alleged Gupta money laundering scheme, which saw a family-related business sign off a R30 million wedding as a business expense – paid for with money taken from funds paid by the Free State government.
According to reports last week from amaBhungane, citing many emails from the Gupta leaks, Gupta businesses took money meant for an agricultural project in the Free State, and ran it through bank accounts in India belonging to businesses owned by the family.
Two different Gupta-linked companies – Linkbay Trading and Accurate Investments – were then billed for and paid the tune of R30 million for wedding services, to cover the cost of the infamous 2013 Gupta wedding at Sun City.
According to amaBhungane, KPMG – Linkbay’s auditors at the time – not only did not pick up on the laundering taking place, but also ignored warnings from junior auditors on the matter.
KPMG has denied the allegations that it was involved in any alleged money laundering activities.
A report by the Mail & Guardian said that Sygnia notified KPMG that it would terminate its services as external auditors in a note on Thursday.
“The meeting didn’t dispel, in my mind, the perception that adequate oversight was not exercised,” Sygnia chief executive, Magda Wierzycka told the paper.
Wierzycka said on social media site Twitter on Thursday: “I want to thank the KPMG team working on Sygnia for their excellence and dedication. Unfortunately the battle for SA transcends individuals.”
Delivering a keynote address at the SME Indaba event in Cape Town on Thursday, Wierzycka, said: “We are living through unprecedented times in South Africa where politics and economics have converged – one completely dependent on the other.
“We are living through times when we are witnessing a battle between all that is good and decent in South Africa, and all the represents greed, corruption and economic destruction.”
“What is happening, and what is affecting business amongst others, transcends the politics of one party. It is a battle for the soul and the future of South Africa.”
Wierzycka said that a low road scenario for South Africa is one where corruption becomes a way of doing businesses – “we have already seen international companies such as KPMG, McKinsey, SAP, Bell Pottinger, be it through commission or omission, looking the other way or not asking the right questions – implicated”.
“We have five months to turn South Africa around. If we do not, we are in for a very tough time. It will be very difficult to do business in an economy where there are no jobs, and hence no consumption or demand for goods or services.
“We are at a cross-roads – but we are not helpless! I would encourage each and every one of you to walk out of here today emboldened to take action. We have a very narrow window of time to stand up and be counted. Those that do, will be remembered,” said Wierzycka.
Read: We should pay Zuma to quit: Sygnia CEO
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