KPMG South Africa’s new chief executive has today spoken of how she is “greatly disappointed” by serious “mistakes” made by the firm in its dealings with the controversial Gupta family, she told lawmakers in Johannesburg today.
Speaking before the the parliament’s standing committee on public accounts, Nhlamu Dlomu said: “Tt’s important for us to acknowledge the mistakes we made in the course of doing our work.”
She said that KPMG South Africa is to carry out an independent inquiry into the case, believed to have been insisted upon by KPMG International, and that there would be full disclosure and transparency, with the inquiry’s findings to be made public.
The scandal last month caused the downfall of Bell Pottinger, and hinges upon alleged corruption involving the Gupta family and controversial president Jacob Zuma, pictured above, who all deny that anything improper had taken place.
New York-headquartered management consultancy McKinsey has ordered an enquiry into its South African office’s dealings with the Guptas.
Specifically, regarding KPMG’s “mistakes”, the auditors allowed a Gupta firm to write off costs for a family wedding as legitimate business expenses.
It was also involved in what was said to be a smear campaign against respected finance minister Pravin Gordhan by colluding in a tax report for the authorities that was used by Zuma supporters to attack Gordhan.
‘Sacked in a midnight reshuffle’
Zuma sacked his respected finance minister in a midnight reshuffle in March of this year.
Last month, KPMG South Africa conceded that both these decisions had been mistakes, retracting both, with outgoing chairman of KPMG International John Veihmeyer apologising “for what went wrong in KPMG South Africa”.
The fallout is continuing to hurt the auditing giant in South Africa, with the country’s leading university Wits this week joining the exodus of clients.