Paul Kirk
Big brand name holders in South Africa were in an uproar this week as KPMG one of the world’s top auditing companies refused to take action against an allegedly crooked director who is accused of running a massive scam involving counterfeit goods.
The director, Johan Beets, was mandated to investigate customs violations and counterfeiting operations on behalf of the Anti-Counterfeiting Coalition (ACC), a loose confederation of brand holders who employ KPMG’s services.
The computer software industry alone loses in excess of R250-million every year due to counterfeiting operations mainly run out of the Far East.
However, instead of clamping down on counterfeit goods, Beets and two alleged accomplices, fellow KPMG director Gerhardt van der Merwe and a junior employee of the firm, Johann Heydenrych, allegedly seized counterfeit goods from importers and then sold the goods on the black market.
This week Beets was still employed by KPMG and still at work, supposedly policing the counterfeit industry.
Furthermore, KPMG is involved in discussions with Superintendent Lourens van der Westhuisen, the cop coordinating the investigation into Beets with a view to employing him. The fact of these discussions was confirmed by KPMG.
Now members of the ACC are walking out of the coalition, livid with the treatment they have received from KPMG.
Beets and his allegedly crooked schemes first came to the attention of the Johannesburg commercial crime unit more than a year ago after clothes from a container of counterfeit goods seized by KPMG in Johannesburg suddenly appeared on the streets of Durban.
Since then police and customs officials have been probing Beets and his operation. In October KPMG fired his alleged accomplice Van der Merwe and suspended Heydenrych who later died.
Last year KPMG informed members of the coalition of the disciplinary measures but asked them to continue dealing with Beets. KPMG also assured members of the ACC that no other KPMG member was under suspicion.
At the same time KPMG began negotiations with Van der Westhuisen to offer him a job at the firm.
Last week Beets’s home was searched by officials from the Scorpions unit and police, who, after obtaining details of his bank accounts and other evidence, suspected Beets was the mastermind of the operation that cost his customers millions in lost revenue.
Speaking on condition of anonymity, one major brand holder said it had decided to resign from the ACC due to the actions or rather lack thereof of KPMG. The brand holder said the counterfeiting industry was largely controlled by Far Eastern organised crime syndicates who produced counterfeit goods for next to nothing in China then made a killing selling them as the real thing.
The brand holder said it lost half its market to counterfeit goods. Fear of the crime syndicates discouraged it from making any public stance.
Managing director of KPMG forensics, Petrus Marais said the company is confident of Beets’s innocence. He said his firm has studied the affidavits against Beets by members of the Scorpions and is still confident of his integrity. Marais also pointed out that the Scorpions seemingly have little in the way of corroborating evidence against their man.
Marais said there was nothing irregular about the job offer to Van der Westhuisen.
“We were involved with negotiations with the superintendent. The superintendent was not the investigating officer per se in the case, but the commander of the unit that was doing the investigation. There is nothing irregular about the offer and we have broken off talks until such time as this matter is finalised.”