Joining a host of other local companies breaking ties with the firm caught up in an influence-peddling scandal, South African miner, African Rainbow Minerals -a leading South African diversified mining and minerals company- has become the latest company to drop KPMG as its auditor. Earlier this month, South African retailer, The Foschini Group (TFG) and the University of Witwatersrand had also disengaged from the services of the consulting firm in South Africa.
The financial services firm KPMG, has been losing clients after it announced a major shakeup in leadership following an internal investigation of its practices while doing work for the wealthy Gupta family at the center of the country’s corruption inquiries with the accusation of using their friendship with President Jacob Zuma to win government contracts.
Denying the wrongdoing, the Guptas and Zuma said they are victims of a politically motivated witch-hunt. It’s the latest move amid allegations of financial scandal that have swept the country.
KPMG said its investigation found no evidence of corruption or illegal behavior but identified “work that fell considerably short of KPMG’s standards.” This as a direct result, led to the resignation of the multinational audit firm’s COO and risk management partner Steven Louw, as well as CEO Trevor Hoole, who was replaced by Nhlamu Dlomu, the company’s former Head for People and Change.
Following the crisis, South Africa’s Finance Minister Malusi Gigaba instructed all government and public agencies to review their accounts with KPMG and to ensure audit processes have not been compromised.
With the crisis rocking KPMG, the accounting firm has lost its Business Leadership SA membership as it has been suspended by the association. The crisis has also cost KPMG, clients such as Telkcom, Wits University and Standard Bank, amongst others.