South African regulator to fast-track KPMG investigation

by Reuters 0

South Africa’s audit regulator will fast-track an investigation into global auditor KPMG over work done for business friends of President Jacob Zuma, the regulator’s chief executive told lawmakers on Tuesday.

The Independent Regulatory Board for Auditors’ inquiry into KPMG follows an internal investigation in which the firm found work it did for companies owned by the Gupta family “fell considerably short” of the firm’s standards.

The Guptas, a trio of businessmen accused by a watchdog of improperly influencing the award of government contracts, has denied wrongdoing, as has Zuma.

But KPMG last month cleared out its South African leadership as several companies considered dropping KPMG and after the finance minister asked government departments to review their work with the firm.

“We will fast-track the investigation, but we have to respect the prescribed process of the auditing profession act and disciplinary rules,” Independent Regulatory Board of Auditors CEO Bernard Agulhas told parliament’s finance committee.

“In the beginning we did not always receive the information that we required. It was important that the process isn’t delayed,” Agulhas said, adding that KPMG has since committed to cooperate with the probe.

Nearly a dozen of South Africa’s blue-chip companies use KPMG’s services, including three of the nation’s four largest banks.

The central bank has told top lenders they cannot fire KPMG because it might undermine financial stability, two sources with knowledge of the matter told Reuters.

Writing by TJ Strydom; reporting by Wendell Roelf; editing by Joe Brock and Jason Neely