Picture: Reuters/Mike Hutchings
Picture: Reuters/Mike Hutchings

Redefine cuts KPMG over bad reputation

By Roy Cokayne Time of article published May 7, 2018

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JOHANNESBURG - Embattled auditing firm KPMG has lost another major client, with listed company Redefine Properties confirming its board has decided to terminate its services.

This follows KPMG losing the accounts of a number of other major companies, including Barclays Africa, Foschini, Interwaste, Sygnia and Wits University, while Auditor-General Kimi Makwetu last month terminated the firm's public sector contracts with immediate effect.

Redefine said on Friday that it had placed KPMG on notice and the firm’s appointment as external auditors would terminate on conclusion of the audit related to Redefine’s 2018 financial year, which was expected to be on or about November 30 this year.

KPMG lost these accounts following its report on the so-called SA Revenue Service “rogue” unit, which it subsequently withdrew, and more recently the firm’s failure to pick up irregularities at VBS Mutual Bank.

VBS is currently under curatorship and forensic investigation after the curator was unable to trace R900million of the R2.9billion held with the bank.

Redefine proposed at its general meeting in February that KPMG be re-appointed the company’s independent external auditors for the 2018 financial year on the proviso that “the audit and risk committee actively monitor the outcomes of the investigations under way and take appropriate action as and when further information becomes available”.

The company said that after the general meeting and KPMG’s successful re-appointment, its board, through the audit and risk committee, thoroughly assessed the continuing and more recent developments as were communicated by KPMG and reported on in the media.

It said concerns over good governance and ethics compliance motivated this decision.

Andrew Konig, the chief executive of Redefine, said on Friday Redefine’s reputation was everything and their decision was made for this reason.

“We will have a new auditor on board for the 2019 financial year,” he said.

Leon Kok, the chief financial officer of Redefine, said the decision was not taken lightly.

“Audit quality, consistency and continuity are of paramount importance to Redefine and we are mindful of the time and effort it takes to onboard new external auditors.

“Given the current circumstances and in the best interest of all our stakeholders, we felt it appropriate to commence with this change as soon as possible,” he said.


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