The Board of Business Leadership South Africa (BLSA) has decided to suspend the membership of KPMG (SA) pending the outcome of an independent investigation into the organisation’s involvement in conduct related to “state capture” in South Africa.
BLSA said in a statement on Friday that the move follows a process of engagement with KPMG, "allowing them to fully present their case, and consideration of the perspective of other important actors, such as the regulators".
"BLSA recognises the considerable steps announced by KPMG to change its leadership and commence a process of cultural change," the statement said.
"It cannot, however, look past the gravity of their conduct which is completely inconsistent with the values of BLSA, contained in our Integrity pledge. We must live by example, and that starts with our own members.
"While KPMG has badly let itself down in South Africa, BLSA recognises that the overwhelming bulk of KPMG’s staff are committed, honourable and diligent individuals who were not implicated in 'state capture' activities. They and the firm remain an asset to the South African economy."
BLSA chief executive Bonang Mohale said: "We are deeply concerned by the unethical and unprofessional conduct that KPMG engaged in in South Africa.
"The firm became party to the project of 'state capture' which has harmed our country, victimised certain individuals and damaged the reputation of business."
BLSA said it believed the situation calls for an expeditiously managed independent inquiry and full disclosure on the part of KPMG to uncover the extent and role of individuals involved in the state capture project. Anyone found to be in breach of the law should be prosecuted it added.
"Corruption is unacceptable wherever it shows its face, and business should never be party to the widespread corruption in all levels of government and in state-owned enterprises. KPMG will do society a considerable service if it assists in this process through full participation in an independent inquiry."
Last week, KPMG announced that it intended to withdraw its report on a probe into the existence of a “rogue spy unit” within the South African Revenue Service (Sars), while it said work done for the controversial Gupta family "fell considerably short of KPMG's standards".
KPMG South Africa appointed Nhlamu Dlomu as its new chief executive following the resignation of the top leadership of the company, including chief executive Trevor Hoole, chairman Ahmed Jaffer, chief operating officer Steven Louw and five other senior partners, while it said it was pursuing disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.
KPMG further said it would donate the R40 million it earned in fees from Gupta-controlled firms to charity and refund the R23 million from the controversial Sars report.