KPMG lobbying for blackout on its Gupta report

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KPMG lobbying for blackout on its Gupta report

The auditing firm is playing its cards close to its chest as the Ntsebeza Inquiry gets underway

Journalist

Beleaguered global auditing firm KPMG does not want a damning report it compiled into work done by KPMG SA for the Gupta family and SARS to be made public.
This was revealed on Monday, the first day of the public hearings of the inquiry, which was set up to investigate members of the South African Institute of Chartered Accountants (Saica) employed by KPMG. The inquiry aims to determine if they may have contravened the code of professional conduct.
The inquiry is being headed up by Advocate Dumisa Ntsebeza SC.
The KPMG International report was compiled following serious allegations of misconduct against the auditing firm in relation to work done for Gupta companies. KPMG SA faced similar claims for its work in compiling the controversial “SARS report” in the so-called rogue unit saga at the tax service.
The firm made headlines when it emerged from the leaked Gupta e-mails that it may have been involved in state capture.
In a statement last September, KPMG International announced that as a result of the investigation, the company’s South African CEO Trevor Hoole and COO Steven Louw had resigned, together with the chairman of the board, Ahmed Jaffer, and six other executives.A legal representative of KPMG, from Bowmans law firm, said KPMG International was asserting a right of privilege over the document. However, he said that following discussions at the inquiry it would be proposed that KPMG make the document available only to the panel members of the inquiry, under strict conditions.
These conditions may include that no copies be made of the report and that it may not be quoted in the proceedings in future. However, the conditions have not been confirmed.
Ntsebeza said if KPMG and the evidence leaders could not agree on the status of the report and other documents as privileged, the panel would hear arguments and then decide on the matter.
“There should be an attempt to see if this cannot be negotiated,” Ntsebeza said.
“If it is the entire KPMG International report then the evidence leaders must determine whether it is a report which they find is critical for this inquiry.”
Earlier on Monday Saica CEO Terence Nombembe highlighted in his opening statement the seriousness of the issue and urged the panel to “leave no stone unturned” in seeking evidence of wrongdoing in terms of the institute’s code of conduct.
The inquiry also briefly heard from the institute’s project co-ordinator, Juanita Steenekamp, who agreed, after questioning by the panel, that due to the years of training it takes to become a chartered accountant, no person who appeared before the inquiry could “claim ignorance” to the provisions of the SAICA code of conduct.KPMG’s willingness to provide information to the Ntsebeza inquiry also came under the spotlight.
However, junior advocate representing KPMG Lerato Zikalala said the firm had made four submissions to the inquiry and had written to it trying to get clarification on what information was being sought.
“KPMG has sought to comply and participate fully in the inquiry,” she said.
The final SARS report compiled by KPMG had been provided to the inquiry on Friday after SARS granted permission, Zikalala said.
This follows a request by former SARS officials’ legal representation to have the final version made available to them, as they have only had access to a leaked draft of the report to date.
The hearing is expected to resume on Wednesday and new evidence from individuals will be heard on Thursday.

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