Energy investment company bails on KPMG over reputational risk

Another company has cut ties to KPMG South Africa, citing reputational risks in the fallout of the Gupta and SARS saga.

South African energy investment group, Hulisani is the latest company to drop the auditing firm, following news earlier on Tuesday that financial services group, Sasfin, would end an 18 year relationship with the company.

Hulisani’s chief executive said that the company’s risk committee looked at “various factors” surrounding KPMG, including media reports, and decided that it would be in company’s best interests to change auditors.

According to eNCA, along with Investec, Absa, Standard Bank and Old Mutual – which had previously indicated they were reviewing and engaging with KPMG over their relationships with the group – two more companies are now also considering their position: Growthpoint Properties, and Sibanye Stillwater.

KPMG made wide-sweeping changed to its leadership on Friday (15 September) following an internal investigation that found that the group did not meet quality standards in its work for the Gupta family.

Eights executives, including CEO Trevor Hoole, resigned, with the company seeking the dismissal of one more.

The company is currently being investigated by regulatory bodies for allegedly turning a blind eye to possible money laundering practices by Gupta-linked companies. Its internal investigation found no wrongdoing or illegal activity on KPMG’s part, but found that the Gupta companies involved “misrepresented information”.

Several companies have already cut ties to the firm, with others currently re-evaluating their relationship with the auditor, pending the outcome of the investigations.

Read: Sasfin dumps KPMG after 18 years

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Energy investment company bails on KPMG over reputational risk