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Reserve Bank denies directing banks on KPMG ties

06 October 2017 - 11:40 By Olivia Kumwenda-Mtambo
The South African Reserve Bank building in Pretoria. File photo.
The South African Reserve Bank building in Pretoria. File photo.
Image: GALLO IMAGES

The Reserve Bank said on Friday it had not given banks any instructions on their relationships with KPMG as a result of a scandal involving the auditing firm.

Sources told Reuters last week that the central bank had told top South African lenders they cannot fire KPMG, because this might undermine financial stability.

"The South African Reserve Bank would like to state categorically that it has not instructed banks on what steps they should, or should not take, with regards to their contracts with KPMG," the central bank said in a statement.

KPMG sacked its South African leadership last month after it said it had found work done for companies owned by the Gupta family, who are close friends of President Jacob Zuma, "fell considerably short" of its standards.

The Guptas and Zuma have denied any wrongdoing.

Several companies have fired KPMG as a result of its alleged involvement in the scandal, with South Africa's branded consumer products firm AVI Limited the latest firm to drop the global auditor.

Governor Lesetja Kganyago said in September that the central bank was concerned about "regrettable" practices at KPMG and would engage banks and audit firms so that the regulator was better placed to manage any financial stability risk.

"These engagements have taken place but at no point did the SARB instruct banks on how they should deal with KPMG," it said.

KPMG South Africa's chief executive on Thursday told lawmakers the company would implement reforms to ensure the firm did not repeat "greatly disappointing" work it did for the Gupta family. 

Reuters


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