Barclays Africa joins growing list of companies to drop KPMG

2018-05-03 13:40

Barclays Africa is the latest high-profile company to sever ties with embattled auditing firm KPMG.

On Thursday Absa’s parent company, Barclays Africa, announced that it had notified its shareholders that its board of directors was withdrawing its recommendation that auditing firm KPMG be reappointed for 2018. The board was due to announce the reappointment at its annual general meeting on May 15.

KPMG had been embroiled in controversy over its work for the Gupta family and allegations of links to state capture.

In a statement released on Thursday morning, KPMG noted Barclays Africa’s announcement that it had withdrawn its recommendation.

“We are disappointed by, but fully accept, the decision. We are very proud of the work that we have performed for Barclays Africa Group over many years, and of the diligence and professionalism of the team who served them,” read the statement.

JSE-listed companies such as Deneb investment, Sygnia Asset Management, Sasfin Bank, and energy investment company Hulisani had cut ties with the firm and other companies were reviewing their relationship with KPMG.

Last month, Auditor-General Kimi Makwetu terminated contracts with KPMG and Nkonki Inc, which had been implicated in Gupta-related controversies, saying that the termination extended to all branches of government.

At the time Makwetu said this decision had been influenced by media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners.

This was the first time the Auditor-General had terminated work with one of the big four auditing firms.

The firm began losing clients following an investigation that it conducted last year that found flaws in work it did for the tax collection agency and the Gupta family.

Southern African Fraud Prevention Service’s head, Manie van Schalkwyk, said the exposure of wrongdoing that had been uncovered in previously reputable companies such as “Bell Pottinger, McKinsey, KPMG and more recently Steinhoff” indicated that “high level economic crime had become more common in the corporate arena”.

These crimes had eroded the average citizens’ trust in these stakeholders, he said.

In the statement released on Thursday KPMG said: “We have implemented far-reaching changes over the past seven months to all aspects of the firm including governance, quality, and risk management. Work to underpin the quality of our services and integrity of our professionals continues.

“We are confident the steps we are taking to change the firm are the right steps to restore trust in KPMG, and we remain resolute in our determination to achieve this goal.”

Juniour Khumalo
City Press
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March 17 2019