Billionaire Motsepe’s African Rainbow Minerals gives KPMG the boot
African Rainbow Minerals (ARM), founded by South African billionaire Patrice Motsepe, has announced that it will be axing KPMG as the group’s internal auditor, becoming the latest high-profile company to give the auditing firm the chop.
In a statement on Monday (23 October), ARM said that it “noted with concern the questions raised about KPMG’s governance and ethics compliance”, as well as allegations regarding the lawfulness of the firm’s conduct.
“After careful consideration, ARM has decided to terminate its relationship with KPMG,” it said.
KPMG has been accused of aiding state capture by facilitating or ‘turning a blind eye’ to alleged money laundering by Gupta-linked companies – which allowed the family to pay for a R30 million family wedding in 2013 – and for embellishing information in SARS report to push certain political agendas.
The group has since apologised to those affected and withdrawn the SARS report, while it conducted and internal investigation regarding its work for the Gupta companies and found that it had not done anything illegal, but conceded that its conduct and reporting did not meet its own quality standards.
In the wake of the scandal, which has left the company with a credibility crisis, several companies and government departments have dropped the firm as auditor, while others are awaiting the results of at least three independent investigations before making any declarations.
Among the companies who have dropped the firm are Sasfin, Sygnia, the Institute of Directors in Southern Africa, Hulisani, and parliament’s medical aid scheme.
South Africa’s banks are holding out for a result from the investigations, while the auditor-general and the Reserve Bank have chosen to keep the firm on.
Read: A look at KPMG’s new R220 million head offices in Umhlanga
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