Trevor Hoole, the chief executive of KPMG South Africa, said in a statement on Friday his firm would be working with KPMG International (KPMGI) to “address the issues raised by various stakeholders regarding the work we previously performed for companies related to the Gupta Family (the Group)”.
“Mistakes have been made and painful lessons learnt”.
The review team, the statement said, would be led by an experienced senior partner from the KPMG network, who would report to both the KPMGI’s global vice-chair of "quality risk and regulatory," as well as to the local board. Also part of the review team was Norton Rose Fulbright as external legal counsel, and other independent experts.
“While the last audit opinions for the Group were signed for the 28 February 2015 year ends, it is now clear that based on publicly-available information, KPMG should have resigned earlier than March 2016 and should have stopped working for the Gupta companies sooner than we did.
“In my judgment, we were too slow to recognise the wider public interest related to these matters, given the existing socio-political environment in South Africa”, the statement read.
Hoole’s admission comes after emails from the Gupta Leaks showed that payments that had allegedly been made to the Gupta’s Linkway Trading were used to cover the costs of a wedding held at the Sun City resort in 2013.
The emails also revealed that four local KPMG partners were guests at the wedding.
“Neither our review of Linkway Trading nor the broader review into professional services rendered in the wider Group has, to date, found any evidence that KPMG in any way supported or condoned alleged tax evasion or money laundering, nor that there was any dishonesty by the teams," the statement adds.
Hoole did however say that they accept that the partners should never have attended the wedding.
He said that the lead audit engagement partner had been suspended.
“We reiterate that our review, to date, has not found any evidence of dishonesty on the part of the partner,” the statement added.
Two other partners had been relieved of their board and executive positions pending the outcome of the review.