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3 minute read
3 Oct 2017
2:40 pm

Regulatory board to fast-track probe into KPMG’s work for Guptas


The IRBA says at this point it is focusing on KPMG’s role in the auditing of Linkway Trading, a company that belongs to the Gupta family.

Pedestrians walk past the KPMG Offices on Empire Road in Johannesburg on 15 September 2017. Picture: Yeshiel Panchia

The Independent Regulatory Board of Auditors (IRBA)  said on Tuesday it has met with KPMG international chairperson Bill Thomas and urged him to ensure full cooperation with its investigation into work the auditing firm did for the Gupta family’s business empire.

IRBA CEO Bernard Agulhas said since that meeting, which also included KPMG SA CEO Nhlamu Dlomu, last week the board has seen better cooperation with the probe and plans to fast-track it.

“Since our meeting with them at international levels, their attitude has improved,” Agulhas told the media after briefing parliament’s standing committee on finance.

He had told the committee that KPMG had initially “not cooperated fully”, despite assurances that it would do so, after questions arose in June over its handling of the accounts of the Gupta family.

The family of Indian extraction is at the centre of a storm over the alleged manipulation of public processes to benefit politically connected people and KPMG is accused of helping them secure contracts with the government worth billions of rands.

Agulhas confirmed that the IRBA probe is at this point focused on KPMG’s role in the auditing of Linkway Trading, a company that belongs to the Gupta family, and was allegedly involved in the diversion of public funds invested into the Vrede dairy farm in the Free State to the United Arab Emirates. It also includes the fact that KPMG executives attended a Gupta family wedding at Sun City in 2014.

It is alleged that funds funneled to the UAE were used to pay for the lavish wedding.

Agulhas told MPs the IRBA investigation could be expanded to include the KPMG report on the so-called rogue intelligence unit set up within the South African Revenue Service on the watch of former finance minister Pravin Gordhan. The report was commissioned by Sars commissioner Tom Moyane, and has been used as the basis for attempts to lay criminal charges against Gordhan.

Agulhas said though this was a forensic report, the board had established that it was penned by a registered auditor, and therefore it was within IRBA’s mandate to investigate it.

He said the average length of an IRBA investigation was about 18 months, but the board would seek to expedite the KPMG probe because it was a matter of public interest.

He expressed frustration, echoed by MPs, that the highest sanctions the board could impose on errant members were expulsion and fines of up to R250,000 per charge and urged the committee to support legislation that would provide for bigger fines.

Committee chairman Yunus Carrim said the measure would have his full backing, but cautioned that if new penalties were introduced these could not be made to apply retroactively to an investigation currently underway. He said those found guilty should be referred to the police and the National Prosecuting Authority.

The finance spokesman for the Democratic Alliance, David Maynier,  said he has written to Agulhas urging him to extend the investigation to cover the SARS intelligence unit report.

– African News Agency (ANA)