EDINBURGH — KPMG South Africa CEO Trevor Hoole has consistently refused to answer questions about the role of KPMG in state capture. When he does, he points the finger of accountability away from his office door. His public relations strategy to deal with the media coverage of KPMG in graft is remarkably similar to the approach taken by Bell Pottinger CEO James Henderson, who was confident the #GuptaCurse would blow over and it would soon be business as usual. Henderson was in the midst of a major reputational crisis but didn’t realise this until it was too late. Clients have cut loose from London-headquartered global agency Bell Pottinger, the business is up-for-sale, Henderson has resigned and careers are in tatters. Meanwhile, KPMG is emitting the message that it is too big to fail, and too big to be accountable. This is evident in KPMG’s breathtakingly disingenuous response to questions put to Trevor Hoole by Sygnia CEO Magda Wierzycka, who fired the firm in connection with its Gupta links. Before Sygnia pulled the plug on KPMG, Hoole promised to give Wierzycka answers about a controversial KPMG report being used as a political weapon against Zuma critic Pravin Gordhan. Now Hoole says he only talks to current KPMG clients. Maybe another principled CEO will step up behind Wierzycka to ask Hoole the questions he is only prepared to answer if they are from someone who is paying his firm healthy sums? Such a move might force a Goliath in business to take responsibility for its actions. – Jackie Cameron

Said it before and will say it again – Magda has more testicular fortitude than a room full of her male contemporaries. Respect. https://t.co/byIOL5klSe — Alec Hogg (@alechogg) September 2, 2017

By Thulisizwe Sithole

KPMG South Africa CEO Trevor Hoole refuses to answer important questions about the role of KPMG in corruption and state capture – the #Zupta scandal that has played into credit ratings downgrades, economic decline, high unemployment and negative business sentiment in South Africa.

President Jacob Zuma’s associates in Parliament, the civil service and in state entities have been exposed as having their snouts in the trough. Companies and private individuals have benefited from corruption and state capture, too, though they largely have managed to avoid the glare of the public spotlight.

The #GuptaLeaks emails reveal that global consultancy KPMG is among the businesses to have benefited and been complicit in the abuse of state funds.

KPMG has worked for the controversial Gupta family, watching as money has been stolen from South African taxpayers to pay for a lavish private event and even assisting the family to dodge tax on these funds. Every cent stolen from taxpayers means more must be squeezed from hard-working, law-abiding individuals.

Worse, perhaps, than the abuse and loss of taxpayers’ funds is the KPMG work that has fed into negative investor sentiment towards South Africa and the economic malaise that has settled on the country that was once one of the world’s most exciting growth prospects.

A prime example of how KPMG has facilitated state capture is a report it compiled for a clique in the South African Revenue Service that has worked to sideline, and even have prosecuted, the former finance minister Pravin Gordhan.

The KPMG report was paid for by taxpayers, who have suffered a double-blow through the loss of the principled Gordhan as a gatekeeper blocking state capture.

Sygnia CEO Magda Wierzycka has asked Hoole privately and publicly to clear up the confusion about the report and be accountable. But Hoole has decided that, as Wierzycka has fired his firm for its Gupta work, he will not be answerable to her.

I call on KPMG to reopen R23m SARS report and correct it. Trevor Hoole, you told me you offered to do that. Stand up and do what is right. https://t.co/eDvzjewEs1 — Magda Wierzycka (@Magda_Wierzycka) September 2, 2017

KPMG has refused to give a detailed response to the media on the same issues. Through his spokesperson Nqubeko Sibiya, Hoole told BizNews that “KPMG SA continues to engage with clients to answer any questions directly”.

BizNews then asked Hoole: “If you are committed to engaging with clients directly, why haven’t you answered Sygnia’s questions? Your response contradicts your action in real life.”

The KPMG response was brief and revealing:

“Sygnia Limited took the decision to end KPMG’s relationship as its external auditor. Sygnia is no longer a client of KPMG.”

Wierzycka said of this KPMG explanation:

“They offered to reopen the report to incorporate Pravin’s and other parties input. This has nothing to do with answering Sygnia’s questions or engaging with us as a client. “The issue is that an audit firm admitted that it produced a one sided biased report which is being used for political means and for which SA taxpayers paid R23 million. “To compound the issue that report was never meant to be made public. It was leaked. I would think a lot of their existing clients would have an issue with that. As would South African public. I really find it so disappointing that SA corporates are not taking a stand on this. UK corporates had no issue firing Bell Pottinger immediately.”

Yeah!!! We reclaim SA by punishing corrupt corporates one at a time. Now if we could do the same to those who commissioned the work… https://t.co/i37ZisC1ol — Magda Wierzycka (@Magda_Wierzycka) September 4, 2017

Keep up with the role of KPMG in corruption here:

Question marks also hover over a KPMG report at the centre of a smear campaign aimed at bringing down former finance minister Pravin Gordhan, who has fought against the Gupta-Zuma clique. Following questions from BizNews, the Institute of Directors has revealed that it has finally decided to temporarily suspend KPMG from its audit committee.The Institute of Directors also doesn’t want KPMG sponsorship for a golf day. Will the #GuptaCurse soon claim more corporate scalps?

KPMG South Africa CEO Trevor Hoole is at best a man who has looked the other way as his associates undertake work that enriches and empowers the Zupta clique transforming South Africa into a kleptocracy. The KPMG name has popped up with increasing frequency wherever there is the smell of state capture and corruption. . Edmunde Burke famously stated: “The only thing necessary for the triumph of evil is for good men to do nothing.” As Gordhan and business leaders like Wierzycka tackle the beast head on, others – like Hoole, his team at KPMG and KPMG friends in business – dig in their heels.

Magda Wierzycka is the first leader in the business sector to take a firm stand against the big corporates who have benefited from state capture. Wierzycka said in a recent interview on television that she was prepared to be outspoken, even though this is not the done thing in the corporate sector, as she is fully committed to seeing a better future for South Africa. Meanwhile, KPMG leaders appear to have their proverbial heads in the sand, opting for a “silence is golden” approach to managing their reputation in this crisis

Magda Wierzycka is one of South Africa’s most successful female entrepreneurs, and arguably its most influential in the financial services sector. Wierzycka has also become one of the most outspoken South African CEOs on the subject of corruption and the abuse of the disadvantaged. Earlier this year, her criticism of asset management rival Allan Gray ultimately led to a change in the boardroom of Net1 – a Nasdaq-listed companyaccused of riding on the backs of welfare recipients. Now Wierzycka has taken action against Big Four accounting firm KPMG.

While South Africans react with outrage over the vast and growing body of evidence that multinationals like KPMG and McKinsey have been complicit in the Gupta state capture campaign, the leaders of these companies are sitting pretty it seems. For example, neither the police nor the Financial Intelligence Centreappear to be investigating damning allegations that KPMG was aware of tax evasion and moneylaundering by the Gupta family. What’s more, KPMG CEO Trevor Hoole and team don’t seem to think they owe South African taxpayers a detailed explanation for the involvement of KPMG in Gupta affairs.

Moses Kgosana was about to take the chair at Alexander Forbes Group Holdings when his name emerged in secret emails leaked from the heart of the Gupta family empire. He has been linked to an accounting manoeuvre that facilitated state payment for an extravagant private event. Read more.

Auditing firm KPMG has been thrust into the limelight for its relationship with the Gupta family – Indian immigrants at the centre of a state capture scandal that has engulfed South Africa. KPMG helped the Gupta family divert taxpayers’ funds to pay for an extravagant family wedding at Sun City and went one step further in ripping off taxpayers by helping the family to avoid paying tax on the funds. Read more.

KPMG, a global big four consulting firm, has underestimated the reputational risks of turning a blind eye1 to corruption and state capture. KPMG’s reluctant apology for helping the Gupta family use state funds to pay for a lavish private wedding – and adding in a nifty tax dodge on this cash – has fallen flat. As top financial columnist Ann Crotty notes in the Financial Mail, many in the corporate world are unimpressed with the way KPMG boss Trevor Hoole and his team have handled explosive revelations of the company’s role in helping a previously poor immigrant family from India raid SA state coffers. The KPMG response speaks volumes about the organisation’s corporate ethics. Read here.

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