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Energy investment company bails on KPMG over reputational risk

19 September 2017

Zuma sacked Gordhan in March.

Sasfin has dropped KPMG as its JSE sponsor as well as its auditor after 18 years over concerns about good governance following the Gupta saga and the Sars "rogue unit" report.

Of course, this fuelled a reaction from the commissioner of the SA Revenue Services (SARS), Tom Moyane, who was furious. He said it was imperative for him to gain understanding on what exactly had happened with the spy report that KPMG compiled for Sars.

"This abhorrent, unethical, and unprofessional conduct by KPMG has left Sars with no option but to consider following the legal route", he said. It would also ask parliament to investigate the firm.

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KPMG said: 'While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG's standards.

Moyane said the revenue services would immediately seize any work which KPMG was now performing for Sars and assess the work KPMG had performed in the past 10 years with the aim to determine whether there was a value for money and whether Sars should demand its money back.

Global consultancy firm McKinsey and Company is also implicated with another Gupta enterprise, Trillian. The DA laid charges of fraud, racketeering and collusion.

Reuters reported last week that McKinsey had ignored suspicions raised over several years that companies it worked with had been set up to steer state contracts.

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"KPMG must be held accountable with immediate effect for its role in manufacturing the "SARS rogue unit" propaganda‚ and in converting the cost of the 2013 Waterkloof military airbase landing [for a] Gupta wedding to a business expense".

The company is now being investigated by regulatory bodies for allegedly turning a blind eye to possible money laundering practices by Gupta-linked companies.

"KPMG is being squeezed from people both sides of this issue", said political analyst Daniel Silke.

"Sars sees KPMG's conduct as nothing else but a dismal attempt to portray Sars, its leadership, and in particular Sars commissioner as incompetent, corrupt, inefficient and involved in a witch-hunt", charged Moyane. SARS were thrown to the wolves. Moyane said the revenue services would immediately seize any work which KPMG was now performing for Sars and assess the work KPMG had performed in the past10 years with the aim to determine whether there was a value for money and whether Sars should demand its money back. But South African's Revenue Service says the company had no right to make the information public and wants the company blacklisted.

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Energy investment company bails on KPMG over reputational risk