Heads roll at KPMG: Trevor Hoole and eight others out
Heads are rolling at KPMG South Africa upon the completion of an internal investigation into the firm’s business dealings with the Guptas.
Amongst nine executives and partners announced to be leaving the firm on Friday is KPMG South Africa’s chief executive, Trevor Hoole who had tendered his resignation to the board and stepped down. The firm’s head for People and Change, Nhlamu Dlomu, will replace him.
The firm has also decided to take disciplinary action seeking dismissal in relation to Jacques Wessels – the lead partner on the audits of the non-listed Gupta entities.
The firm’s international network launched an internal investigation after leaked emails showed a Gupta-owned company, Linkway trading had used laundered money from the state to pay for a family wedding.
KPMG audited the financials of Linkway and KPMG executives attended the wedding.
The investigation also looked into a report the firm had produced for the South African Revenue Services and which confirmed the existence of a rogue unit and which cast aspersions on the integrity of former finance minister Pravin Gordhan.
KPMG however stressed that the investigation found no evidence of corruption or illegal behaviour.
“While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards,” said Andrew Cranston, a senior partner from the KPMG international network who will come in as interim chief operating officer for the South African business following the resignation of Steven Louw.
Also leaving the firm are: Mike Oddy, head of audit; Muhammad Saloojee, head of tax; Herman de Beer, former head of forensic; John Geel, head of advisory; and Mickey Bove, risk management partner for deal advisory. Oddy, Saloojee and de Beer will also step down as KPMG SA board members. Ahmed Jaffer has resigned from the firm and stepped down as chair of the board.
Cranston said the investigation found that quality controls were found to not be in place and there were numerous instances where work done for the Guptas was “lacking in rigour”.
“KPMG South Africa regrets that its association with the Guptas and their business entities went on far too long,” Cranston said.
Cranston said KPMG international would work actively with the South African business to improve audit quality and risk management processes. He noted that there were already a number of processes in place that gives assurances of the general level of audit quality in the South African firm.