Cape Town - The Democratic Alliance has handed over audit firm KPMG International’s statement to the Hawks to assist with their ongoing investigation into the wealthy, politically connected Gupta family, the party said on Sunday.
The DA welcomed the investigation conducted by KPMG International into work performed on behalf of the Gupta family, which resulted in the purge of seven senior executives from KPMG South Africa, DA spokesman David Maynier said.
The investigation into the audits of Gupta entities, including Linkway Trading (Pty) Ltd, a South African company controlled by the Guptas which was allegedly involved in tax evasion, had established that "management of many Gupta entities responded misleadingly and inadequately to audit teams enquires about the nature of related party relationships and the commercial substance of significant unusual transactions”.
The investigation also identified “a series of misrepresentations from the client over the period that KPMG South Africa provided tax advice”.
Maynier said this meant that KPMG International, as well as KPMG South Africa, may have information vital to the investigation being conducted by the Hawks into Mineral Resources Minister Mosebenzi Zwane, Atul Gupta, Ajay Gupta, Rajesh Gupta, Ronica Ragavan, and Kamal Vasram for alleged racketeering, money laundering, assisting another to benefit from the proceeds of unlawful activities, and acquiring, possessing or using the proceeds of unlawful activities in terms of the Prevention of Organized Crime Act; and submitting false, or untrue, tax returns in terms of the Tax Administration Act.
The investigation followed criminal charges laid by Maynier on July 3, 2017 after revelations that public funds meant to assist the poor were allegedly washed through a complex web of front companies and used to pay for Vega Gupta and Aakash Jahajgarhia’s lavish about R30 million wedding at Sun City in 2013.
"I have, therefore, furnished Maj-Gen Zinhle Mnonopi [Hawks head of serious corruption investigation] with a copy of KPMG International’s press statement released on 15 September 2017, which may assist in the investigation being conducted by the Hawks.
"In the end, the investigation and the subsequent purge of seven senior executives is unlikely to be enough 'red meat' to stop the bleeding at KPMG South Africa, which now faces possible litigation from former minister of finance Pravin Gordhan for its role in the forensic audit into the SARS 'rogue unit'; an investigation into what appears to have been a see-no-evil approach to auditing by the Independent Regulatory Board of Auditors; and an investigation into its former clients for racketeering, money laundering, and submitting false or misleading tax returns being conducted by the Hawks," Maynier said.
On Friday, Gordhan welcomed the withdrawal of the KPMG South African Revenue Service (SARS) report on the work KPMG SA did for SARS and on behalf of the Gupta family. Gordhan said he was surprised by the “scant regard” shown by the firm for their role in the “capture” of the revenue service and the “huge damage that it has done to the livelihoods and reputations of a very professional, honest, and loyal group of public servants”.
“So let me categorically state that which KPMG ought to have had the integrity and honesty to state: the research and investigative unit created in the South African Revenue Service (SARS) was legal; its activities in detecting and combating the illicit tobacco trade and other efforts aimed at bringing an end to tax evasion were within the law; [and] KPMG had no basis, except subservience to a malicious SARS management, to malign a number of individuals and facilitate, I repeat, the capture of a vital state institution,” Gordhan said.
In December 2014, KPMG SA was commissioned by SARS to perform an extensive document investigative review which resulted in the “Report on Allegations of Irregularities and Misconduct”.
Gordhan was investigated by the Hawks over the alleged unit, but was eventually charged with an administrative issue over the rehiring of former deputy commissioner Ivan Pillay and his pension package.
KPMG SA CEO Trevor Hoole as well as chief operating officer and country risk manager Steven Louw resigned on Friday, along with a five other senior executives.