'KPMG, do right thing'

KPMG must do more to salvage its reputation in South Africa, said SA Reserve Bank governor Lesetja Kganyago this week.

In an interview with London's Financial Times, Kganyago warned that failure to do so could imperil the global accountancy firm's international business.

KPMG SA is embroiled in the Gupta scandal, which has already forced the resignation of its top management team and caused at least three clients to drop the firm as their auditor and others to consider doing so.

Kganyago said KPMG had taken "a step in the right direction" by committing to an inquiry into its activities. But he urged that the inquiry should be genuinely independent and that results should be made public.

He also appeared to call for resignations from consultancy McKinsey's South African management team, saying that other companies implicated had taken similar action. "We hope McKinsey will do the right thing soon."

McKinsey & Company SA have been accused of working with a firm linked to the Guptas in order to secure state contracts.

McKinsey has said its probe is ongoing.

"We will act decisively if we discover any breach of our professional standards," it said.

In July, Germany's SAP suspended four executives after accusations that the software company paid R100-million in bribes to a Gupta-related company to secure state work.

Kganyago said: "KPMG has got to own up. South Africans are angry with what KPMG have done. They have accepted work they should not have accepted.

"This is a global firm that is supposed to have global standards and understandably clients will be asking lots of questions."

Evoking the fate of disgraced US accounting firm Arthur Andersen, Kganyago said if KPMG could not control the situation here in South Africa, the crisis could spread to its international business.

KPMG audits or co-audits four of the biggest five banks in South Africa, including Investec and Barclays Africa, both of which are reviewing their relationship with the firm.