THE BOTTOM LINE
Snickers as Standard Bank sticks with tainted KPMG
Puzzling vote at bank’s AGM to reappoint auditing firm
For all KPMG’s shortcomings, it was still favoured over its less tainted rival PwC at Standard Bank’s AGM on Thursday.
In an ironic twist, the bank’s shareholders preferred the reappointment of KPMG to PwC. PwC has hired about 80 of KPMG’s staff since the fallout, but mostly on the advisory side. The vote is puzzling to say the least.
And the irony was not lost on those gathered. Audible snickers followed the votes and there were a few smiles, including from Standard Bank CEO Sim Tshabalala. Of the 81% of Standard Bank’s share capital represented at the meeting, 87.87% voted to reappoint KPMG, while 84.69% supported PwC.KPMG CEO Nhlamu Dlomu, who was present, must have breathed a sigh of relief. The support of Standard Bank and its shareholders – while conditional upon the outcome of various investigations – is a buttress against the storms facing the firm. KPMG has already lost one major banking client in Barclays Africa, not to mention a host of other public companies and the auditor-general.
When mandatory audit firm rotation comes into effect in 2023, KPMG will lose clients by default – as happened this week with Gold Fields – so it has to win new business just to stand still.