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Corruption complicity see heads roll at KPMG South Africa
October 5, 2017, 5:13 pm

KPMG International, one of the world's 'big four' audit and management consultancy firms, began cleaning its South African stables, just weeks after allegation of the firm’s role in facilitating illegal business activities in the country.

Top leadership of South African unit of KPMG decided to step down, following the firm's alleged complicity in the scandal over corrupt practices by the Gupta family, who have been closely linked to President Jacob Zuma.

The South African unit of KPMG stands accused of assisting the Gupta family business empire to irregularly seize billions of rands worth of government contracts. The firm is also charged with having drawn up a damaging report on former South African Finance Minister Pravin Gordhan, which led to his firing and subsequently fueled factional infighting within the government and the ruling African National Congress (ANC).

KPMG International, the parent company of KPMG South Africa, said that though an internal probe “did not identify any evidence of illegal behavior or corruption by KPMG partners or staff, it did find work that fell considerably short of KPMG’s standards.” As a consequence, it said, “top leaders of the South African company would step down, including the chairman, the chief executive officer and the chief operating officer.”

In addition, the company said it has offered to refund to the South African government R23 million ($1.7 million), which it charged for a sub-standard investigative report on the South African Revenue Service that was used to discredit the former finance minister. Also, KPMG South Africa would donate R40 million ($3 million) — the total fees earned from Gupta entities since 2002 — to education and anti-corruption NGOs.

KPMG has appointed human resources specialist, Nhlamu Dlomu, as its new South African CEO. She has vowed to clean up the company's image in South Africa. “My pledge and promise to the country is that we can and will regain the public’s confidence,” she said in a KPMG statement.

Apparently, a donation, a change in leadership and some hand wringing is all it takes for management consultants to ‘cut through complexity’ and get back to business as usual.

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