AUDITING firm KPMG confirmed on Friday that it has resigned as auditors for the Gupta family companies.
KPMG was the auditor for all Gupta-owned and -controlled businesses, which are currently at the heart of an investigation by the ruling party into "state capture". The family is close to President Jacob Zuma
A Fin24 report on Friday quoted from an internal e-mail circulated to staff and partners in which KPMG Southern Africa CEO Trevor Hoole said there was no audit reason for withdrawing as auditors.
The firm’s executive director for clients and sectors, Carel Smit, would not comment further on the Fin24 report on Friday, saying it was a confidential matter between KPMG and its clients.
"The recent media and political interest in the Gupta family, together with comments and questions from various stakeholders ... has required us to evaluate the continued provision of our services to this group," Mr Hoole said.
"We have decided that we should terminate our relationship with the group immediately," he said.
"I can assure you that this decision was not taken lightly, but in our view the association risk is too great for us to continue. It is with heavy hearts that we have reached our conclusion, and there will clearly be financial and potentially other consequences to this, but we view them as justifiable."
Before making the decision, KPMG consulted extensively with local regulators, clients, analysts and with its executive committee and policy board.
According to the Fin24 report, Oakbay Investments confirmed the news on Thursday. "KPMG is no longer the auditor for Oakbay Investments," said a spokesperson, who declined to be named.
"KPMG confirmed to Oakbay that no audit reason whatsoever contributed to this development," the spokesperson said.
Mr Smit would not be drawn on whether the move had anything to do with the Finance Minister Pravin Gordhan’s strong rejection of its report on the South African Revenue Service rogue unit which he condemned as being one-sided and compiled without any input from him. The KPMG report concluded that the investigating unit was established illegally, a claim strongly rejected by the minister in his reply to questions by the Hawks this week.
KPMG was the auditor for all Gupta-owned and -controlled businesses, which are currently at the heart of an investigation by the ruling party into "state capture". The family is close to President Jacob Zuma
A Fin24 report on Friday quoted from an internal e-mail circulated to staff and partners in which KPMG Southern Africa CEO Trevor Hoole said there was no audit reason for withdrawing as auditors.
The firm’s executive director for clients and sectors, Carel Smit, would not comment further on the Fin24 report on Friday, saying it was a confidential matter between KPMG and its clients.
"The recent media and political interest in the Gupta family, together with comments and questions from various stakeholders ... has required us to evaluate the continued provision of our services to this group," Mr Hoole said.
"We have decided that we should terminate our relationship with the group immediately," he said.
"I can assure you that this decision was not taken lightly, but in our view the association risk is too great for us to continue. It is with heavy hearts that we have reached our conclusion, and there will clearly be financial and potentially other consequences to this, but we view them as justifiable."
Before making the decision, KPMG consulted extensively with local regulators, clients, analysts and with its executive committee and policy board.
According to the Fin24 report, Oakbay Investments confirmed the news on Thursday. "KPMG is no longer the auditor for Oakbay Investments," said a spokesperson, who declined to be named.
"KPMG confirmed to Oakbay that no audit reason whatsoever contributed to this development," the spokesperson said.
Mr Smit would not be drawn on whether the move had anything to do with the Finance Minister Pravin Gordhan’s strong rejection of its report on the South African Revenue Service rogue unit which he condemned as being one-sided and compiled without any input from him. The KPMG report concluded that the investigating unit was established illegally, a claim strongly rejected by the minister in his reply to questions by the Hawks this week.
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