Cape Town - As the Gupta scandal engulfs embattled audit firm KPMG, there are concerns for the more than 3 000 employees of the firm, many at the regional headquarters in Cape Town.
After the resignation of its top executives, there are fears that the local arm of the Dutch-based firm might implode as it loses its top clients.
The firm is also months away from moving into its swanky new regional headquarters on the Foreshore, built at a cost of R400 million. Developer FWJK said it was going ahead with the building plans as it hadn’t been told otherwise.
On Monday, South African Revenue Service boss Tom Moyane said they would be instituting legal proceedings against KPMG for reputational damage after the firm withdrew an earlier report on a rogue spy unit within Sars.
According to Sars, the unethical and unprofessional conduct by KPMG had left it with no option but to consider the following legal routes:- Instituting legal proceedings against KPMG for reputational damage to Sars including but not limited to a civil claim- Reporting KPMG to the relevant statutory audit bodies both locally and internationally
- Reporting KPMG to Minister of Finance Malusi Gigaba with the aim to blacklist it for its unethical, immoral, unlawful and illegal behaviour
- Reporting KPMG to Gigaba to consider stopping all work being performed by KPMG in other departments as well as any work in the pipeline, until all the work KPMG conducted for the state had been investigated and reviewed for quality and proper auditing quality and expected standards.
It also wants to seize any work that KPMG is performing for Sars and assess the work it has performed in the last 10 years.
Moyane said they would report KPMG to Parliament through the standing committee on public accounts and standing committee on finance to investigate its conduct.
UNDER SCRUTINY: KPMG Place (centre) is a new R400 million development on the Foreshore. The embattled audit firm looks set for more stormy days with threats of lawsuits . Picture: Henk Kruger
The Independent Regulatory Board for Auditors (IRBA) said it would continue its investigations. Chief executive Bernard Agulhas said the IRBA would continue with its own independent investigation.
“The IRBA intends to meet with the new team at KPMG to discuss their remedial action programmes which will be regularly monitored by the IRBA,” he said.
Mnyamezeli Booi, the ANC whip on the Standing Committee on Public Accounts, said: “While we welcome KPMG admitting that their report on SARS lacked sufficient evidence to conclude findings of a “rogue unit”, and offering to repay the R23 million fee it received for the work performed for SARS, we are of the view that KPMG must account on its involvement in what appears to be politically motivated immoral and unethical conduct,” Booi said.
Parliament’s finance committee chairperson, Yunus Carrim, said representatives of KMPG and Deloitte would appear before the committee on October 3.