Panic time for state capture villains

International auditing firm KPMG'S U-turn on its dealings with the Gupta family, and its disavowal of its SARS "rogue unit" report, might well be the most dangerous developments yet for those involved in state capture.

The report - indirectly, and possibly by design - cost the economy billions of rands.

It was used in the ousting of finance minister Pravin Gordhan and the attempt to bring criminal charges against him.

It was cited in the purging of SARS high-risk tax-crimes investigators .

For the masterminds of state capture, it was the ultimate trump card.

It was the "proof" that there were people, including Gordhan, who had "gone rogue" and were determined to oust the country's leadership, particular President Jacob Zuma.

The report - commissioned by the under-fire SARS commissioner Tom Moyane, who went on to lay criminal charges against those involved with the "rogue unit", and Gordhan - lent credence to this argument.

But Friday's sudden reversal by KPMG - after 18 months of deafening silence by the firm - has thrown a spanner in the works.

How could firms like KPMG allow themselves to be used, why are their internal risk-assessment and avoidance policies failing, and why, when red flags are raised and staff speak out, do their most senior executives carry on regardless?

KPMG has finally admitted that it "made mistakes" and that its executives ignored "red flags" raised in connection with aspects of its work for the Guptas and their businesses in securing contracts with state-owned entities, including Eskom.

KPMG SA's interim chief operating officer, Andrew Cranston, says the internal report on the firm's dealings with the Guptas is confidential because it contains "sensitive client information".

What does the report contain that is so sensitive that it cannot be made public? The Guptas - through "successfully tendering" for government contracts - were, after all, paid with taxpayers' money.

One of the biggest concerns is that until now KPMG has not laid criminal complaints with the Hawks, unlike the business rescue practitioners acting for Optimum Coal.

Cranston's admissions will have a huge effect in the battle against state capture.

For a start, they call into question the findings of independent panels established to investigate the SARS "rogue unit", all of which drew on the KPMG SARS report.

KPMG's admission that Gordhan had no idea about the "rogue unit" does not, and should not, mean the firm is out the woods.

If sincere about its mistakes, KPMG must take the public into its confidence and release its internal report and not hide behind "client confidentiality".

KPMG seems to be hoping that, by repaying back the money it made from the Guptas, everything will go away. But that will not happen.