Institute of Directors cut ties with KPMG after Gupta scandal

The Board of the Institute of Directors in Southern Africa (IoDSA) has temporarily suspended all co-branded activities with KPMG‚ while the audit firm conducts a review into work done for the controversial Gupta family.

This included dropping KPMG as a sponsor for its golf day and involvement in the Audit Committee Forum‚ the IoDSA said.

KPMG has come under fire for the role it played in the audit of Gupta-owned Linkway Trading‚ which was allegedly used to channel R30-million of taxpayers’ money to fund the 2013 Sun City wedding. The money was meant to have been used for the upliftment of indigent farmers in the Free State.

This has spurred some of KPMG’s clients to drop the audit firm because of the controversy.

In July‚ Sygnia announced it was breaking ties with KPMG after a meeting between its CEO Magda Wierzycka and the firm’s partners at which she attempted to ascertain how KPMG could have missed "a big money-laundering exercise" related to the financing of the infamous Gupta wedding.

In August KPMG announced that KPMG international would be leading a review into the work it had done for the family.

Following this announcement‚ the audit firm looked set to lose another JSE client as investment company Deneb‚ which is part of the Hosken Consolidated Investments (HCI) group‚ launched its own review of KPMG’s role as the company’s auditor.

IoDSA said it had met with KPMG.

“In line with its commitment to good governance‚ the IoDSA board is allowing KPMG International a fair and equitable opportunity to conduct a thorough internal investigation‚” it said.

The IoDSA said it was also aware of the investigation by the Independent Regulatory Board for Auditors against certain partners at KPMG.

The institute said it would continue to monitor the situation until a “standing decision” could be made based on factual findings in relation to the allegations against KPMG and its relationship with the Guptas.