JOHANNESBURG - Listed financial services group Alexander Forbes steered clear of scandal-hit KPMG, McKinsey & Company and Gupta-linked firms for the sake of its reputation, according to chief executive Andrew Darfoor.
When the series of leaked emails showing the extent of the Gupta family’s hold on the affairs of the state emerged last year, KPMG was implicated. The emails suggested that the firm had a cosy relationship with the Gupta family.
Moses Kgosana, a former chief executive of KPMG Africa, resigned as director of the company with immediate effect in July last year. He was due to take over as chairperson of Alexander Forbes in August last year.
“When the KPMG event happened we took a look and asked: What do we stand for as a brand? We stand for integrity, financial discipline and strong governance. We had a discussion with Moses and, as a man of principle, he agreed that he would step down from the board of Alexander Forbes,” said Darfoor.
When the Steinhoff International scandal broke last year, Alexander Forbes also parted with one of its non-executive directors, Len Konar, who was chairperson of its audit committee. He was also on the audit committee of Steinhoff.
“We had a smooth conversation with Len. When people put their money in Alexander Forbes, they put their trust in us, and (therefore), if there is any allegation of impropriety, whether it is proven or not, we simply cannot stand by. We will not compromise our brand and integrity for anyone.
“We also took a decision that we will not enter into any new affiliation with McKinsey. We had not done any work for McKinsey for a number of years, but with KPMG we were engaged in one or two pieces of work. So we agreed not to enter into new contracts,” he said.
The company also decided not to do any work for Gupta-linked companies, “whether it was on the provident or asset management side. We have taken some principled decisions. People put their money in us. We take that responsibility seriously,” he said.
In a wide-ranging interview with Business Report, Darfoor said Alexander Forbes was not concerned about short sellers such as Viceroy Research. Every market had short sellers, he said.
A short seller borrows shares of a company from an existing owner, sells those borrowed shares at the current market price and pockets the cash.
“(Short sellers) have a role to play in terms of their agenda. But I believe that if you run your business on clear fundamentals, you communicate clearly to your customers and stakeholders and are ethical, there is no role for short sellers. In today’s modern society you have all kinds of investors. They just happen to be one component in the investment universe. At Alexander Forbes we do not have any short sellers engaged with us,” he said.
He also addressed the rising popularity of cryptocurrencies such as Bitcoin. He said Alexander Forbes did not invest in Bitcoin as it wasn’t regulated.