South Africa 5.10.2017 01:36 pm

KPMG executives who resigned after Sars, Gupta fiasco paid exit packages

Motorvehicles drive past the KPMG Offices on Empire Road in Johannesburg on 15 September 2017.

Motorvehicles drive past the KPMG Offices on Empire Road in Johannesburg on 15 September 2017.

KPMG further said it would donate the R40m it earned in fees from Gupta-controlled firms to charity.

Exit packages were paid to senior KPMG South Africa managers who recently resigned in the wake of the auditing firm admitting some of its work done for the South African Revenue Service (Sars) and the politically connected Gupta family fell short of acceptable standards, MPs heard on Thursday.

Briefing Parliament’s standing committee on public accounts, KPMG SA’s new chief operating officer, Nhlamu Dlomu, and the company’s interim chair of the policy board, Gary Pickering, both confirmed that no action, including criminal charges, had been laid against the former top executives.

They would not disclose the size of the severance packages, citing legal issues.

When pushed about the lack of action against those responsible for the probe into the existence of a “rogue spy unit” in Sars and work done for Gupta-owned companies which the auditing firm admitted “fell considerably short of KPMG’s standards”, Dlomu said they were committed to ensuring these individuals were held accountable.

“We are committed to taking appropriate action against those individuals,” said Dlomu.

“We ask for a chance to act on these issues that have been raised.”

Dlomu was appointed chief executive following the resignation of the top leadership of the company, including chief executive Trevor Hoole, chairman Ahmed Jaffer, chief operating officer Steven Louw and five other senior partners. Last month, the company said it was pursuing disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.

KPMG further said it would donate the R40 million it earned in fees from Gupta-controlled firms to charity and refund the R23 million from the controversial Sars report.

On Tuesday, the Independent Regulatory Board of Auditors (IRBA) told Parliament’s standing committee on finance it had met with KPMG international chairman Bill Thomas and urged him to ensure full cooperation with its investigation into work KPMG SA did for the Gupta family’s business empire.

The IRBA probe 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.

MPs also heard the IRBA investigation could be expanded to include the KPMG report on the so-called rogue intelligence unit set up within the Sars 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 unsuccessful attempts to lay criminal charges against Gordhan.

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