Barclays Africa Group is reviewing its relationship with KPMG LLP as the auditing firm comes under scrutiny for work on behalf of South African companies linked to the politically connected Gupta family.<\/p>\n
The nation\u2019s largest lenders, including Barclays Africa\u2019s Absa unit, last year closed bank accounts of businesses tied to the family, who are friends with President Jacob Zuma and in business with one of his sons.<\/p>\n
The former graft ombudsman alleged in November that Zuma let the Guptas influence cabinet appointments and the awarding of state contracts, which they deny.<\/p>\n
KPMG allowed Gupta businesses to divert public money to pay for a Gupta family wedding, according to the Johannesburg-based amaBhungane Centre for Investigative Journalism.<\/p>\n
Absa met with KPMG, KPMG International and the company\u2019s lawyers and was given preliminary feedback on some aspects of the auditing firm\u2019s internal investigation into its Gupta work, the Johannesburg-based bank said in an emailed response to questions on Thursday.<\/p>\n
KPMG told Absa that it will provide more details when it presents the findings of its probe by the end of September, Barclays Africa said.<\/p>\n
\u201cAfter carefully considering the further information requested and the findings, Absa will be in a position to make a decision as to whether to continue to engage KPMG as its external auditors,\u201d the lender said.<\/p>\n
Getting Fired<\/strong><\/p>\n Save South Africa, which includes civil-society groups and business leaders, has called on local companies to drop KPMG as an auditor because of the work it did for 36 entities tied to the Guptas since at least 2008. A review by KPMG hasn\u2019t found any evidence of dishonesty on the part of the suspended partners, the company said last month.<\/p>\n KPMG spokesman Nqubeko Sibiya didn\u2019t immediately answer emailed questions.<\/p>\n The Institute of Directors in Southern Africa has suspended co-branded activities with KPMG, including sponsorship of its golf day, while Cape Town-based Sygnia Asset Management fired the audit firm.\u00a0Other clients of KPMG\u2019s include Old Mutual, Africa\u2019s biggest insurer, and Standard Bank Group, Africa\u2019s biggest bank by assets.<\/p>\n \u201cIf one large corporation, like Absa or Old Mutual, fires KPMG, others won\u2019t have a choice but to act,\u201d Magda Wierzycka, chief executive officer of Sygnia, a Cape Town-based money manager that has terminated KPMG\u2019s services, said by phone.<\/p>\n The South African auditing regulator may well fine KPMG for allowing the diversion of funds for the Gupta wedding, she said.<\/p>\n Wary clients<\/strong><\/p>\n Moses Kgosana, the CEO and senior partner at KPMG at the time of the wedding, has quit several board positions since the allegations, including Wal-Mart Stores\u2019s Massmart Holdings, logistics company Imperial Holdings Ltd. KPMG audits more than 30 listed South African companies.<\/p>\n Sibanye Gold,\u00a0the country\u2019s biggest gold producer, has said it will wait for KPMG to complete its investigation before making a decision.<\/p>\n \u201cWe have continued our engagement with KPMG at the highest level on this matter,\u201d London-based Old Mutual said on Thursday.<\/p>\n Nedbank Group, the insurer\u2019s lending unit, continues to monitor any service providers implicated in dealings surrounding the Guptas and will terminate relationships with them if needed and after a \u201crobust internal process,\u201d chief executive officer Mike Brown said in an email.<\/p>\n Standard Bank \u201cis committed to doing business ethically and in accordance with all applicable laws and expects all of its counter-parties to be similarly committed,\u201d Africa\u2019s largest lender said in an emailed response to questions. \u201cWe exit relationships where that commitment is lacking.\u201d<\/p>\n
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