JOHANNESBURG (Reuters) – The former head of KMPG’s South African unit withdrew on Monday from his appointment as chairman-designate of financial services group Alexander Forbes after leaked emails implicated the auditing firm in an influence-peddling scandal that has rocked President Jacob Zuma’s government.

KPMG South Africa failed to raise red flags when companies owned by friends of Zuma diverted 30 million rand ($2.3 million)of public money to pay for a family wedding in 2013 when Moses Kgosana was CEO, according to leaked emails posted on the non-profit AmaBhungane website, run by a group of journalists that exposes what it says is government corruption.

Reuters was not independently able to verify the allegations.

“Mr Kgosana felt that the demands on his time in the role of chairman of the company whilst attending to these allegations, will interfere with his deliverable expectations,” the company said. “Alexander Forbes welcomes this decisive action.”

Kgosana was due to take over as chairman from next month.

KPMG has denied any wrongdoing.

“We strongly refute allegations that KPMG was involved in, or condoned, any alleged money laundering activities,” it said in a statement posted on its website.

South Africa’s Independent Regulatory Board for Auditors launched an investigation on Friday into the audit of a company alleged to have paid for the wedding.

KMPG said it would cooperate with the watchdog.
($1 = 13.2200 rand)
(Reporting by Tiisetso Motsoeneng; editing by Susan Thomas)