KPMG suffered its first corporate casualty after financial technology firm Sygnia axed the firm as its auditors.
Business Leadership South Africa (BLSA) has suspended KPMG’s membership in yet another blow against the auditing firm.
“We are deeply concerned by the unethical and unprofessional conduct that KPMG engaged in in South Africa. The firm became party to the project of ‘state capture’ which has harmed our country, victimised certain individuals and damaged the reputation of business,” said Bonang Mohale, BLSA chief executive.
BLSA announced in a statement on Friday that KPMG’s membership to the organisation has been suspended pending an outcome of an investigation into the company’s involvement in state capture.
BLSA said that the process had already begun, and KPMG had been welcomed to present their case.
The organisation noted that KPMG had purged its leadership after it retracted elements of its report into the so-called “rogue unit” at Sars. But it wasn’t enough, BLSA said.
“It cannot, however, look past the gravity of their conduct which is completely inconsistent with the values of BLSA, contained in our Integrity pledge. We must live by example, and that starts with our own members,” the statement reads.
Former finance minister Pravin Gordhan has argued that KPMG has assisted in the state capture of South Africa. KPMG has become a pariah in the country as one of the global private firms who are linked to the Guptas.
In August, BLSA vowed to “clean house” and signed a promise with business leaders to root out corruption.
The announcement comes as KPMG faces potential legal action from Sars and Gordhan from the fallout of its earlier retraction.