Barclays Bank drops KMPG from its list of auditors

Barclays Africa fires KPMG over Gupta connections (AGENCIES PHOTO)

The future of KMPG South Africa as a top auditing firm has been cast into further doubt after Barclays Africa Group Ltd on Thursday joined a host of other companies cutting ties with the firm.

A month after the South African government ended its association with the company over allegations of shoddy work, Barclays Africa Group Ltd, which is changing its name to Absa Group Ltd, said it“is no longer able to support the reappointment of KPMG.”

“Subsequent to the release of our AGM notice, the board has carefully evaluated the on-going and more recent developments and decided that it is no longer able to support the reappointment of KPMG,” Barclays said in a statement released on Thursday.

The future of KMPG South Africa is at stake (AGENCIES PHOTO)

“The appointment of KPMG as external auditors of BAGL will cease on completion of the statutory and regulatory audit and reporting matters relating to the 2017 financial year, which is expected to take effect by approximately 31 May 2018,” the statement added.

KPMG said it was disappointed by, but accepted the move by Barclays.

“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.”

“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.”

KPMG’s troubles began over work it did for a company owned by the Gupta family, who are alleged to have used their links to former president Jacob Zuma to amass wealth.

Maria Ramos, CEO, Barclays Africa (COURTESY PHOTO)

A KPMG inquiry found flaws in work it did for the Guptas, who along with Zuma deny any wrongdoing, and the national tax agency. The auditor has said it is cooperating with authorities and addressing its shortcomings.

Subsequently, South Africa Finance Minister Malusi Gigaba called on all government entities to review work with the auditing firm.

Late last year, an influential business lobby group suspended the company’s membership and the governor of the central bank said it was concerned that KPMG’s internal standard controls weren’t of an acceptable quality.

In Uganda, KPMG was recently declared unfit to investigate the controversial sale of the Crane Bank after being pinpointed as having conflict of interest, having been clients of the defunct bank.

Both KPMG and PwC have also been BoU auditors and have previously worked as auditors for Crane Bank. BoU had earlier contracted PwC to carryout forensic audit on Crane Bank.

BoU used the report as a basis to file a case against city property mogul Sudhir Ruparelia. The disputed forensic audit report which Sudhir’s lawyers, Kampala Associated Advocates (KAA), have since called a draft document, was made by PwC on November 13, 2014.

Crane Bank was also audited by KPMG from 2004-2007 and 2013-2015; PwC in 2008-2010; Deloitte and Touche 2011-2012, leaving the Auditor General shortlist with only two firms without issues.

Some analysts have advised that an independent foreign company be outsourced to audit BoU.

Early this year, the Securities and Exchange Board of India (SEBI) banned all the firms in the PwC network from auditing listed companies for two years citing fraudulent dealings. The story was widely reported in international media.



Copyright@2019: PMLDaily

To Top