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KPMG woes deepen on VBS scandal

16 April 2018

"We say for 60 days‚ every one - partner or associate director of KPMG - must see that there is a secure line that they can report those things‚" Nkuhlu said.

KPMG SA head Nhlamulo Dlomu said: "This has been a very disappointing episode for KPMG".

KPMG South Africa on Sunday admitted that senior partners Sipho Malaba and Dumi Tshuma had misled them with respect to their relationship with VBS Mutual Bank. The disappointment and anger in the firm following revelations relating to VBS was "palpable". The bank had been in "extensive contact" with KPMG since the VBS matter came to light and would continue to subject it to the "rigorous processes" with which it evaluated all its suppliers, Daehnke told Business Day. The audit firm that is still reeling from accusations around its "false" Sars rogue report, and the nature of work done for the Guptas, admitted that loans made to Malaba and Tshuma by VBS Mutual Bank had not been disclosed, and that the two men had attempted to mislead KPMG on the nature of the relationship when questioned regarding it. Contributions of 200 words or more will be considered for publication.

In court papers filed by Reserve Bank deputy governor Kuben Naidoo, it emerged that Rooplal suspected "fraudulent transactions conducted to extract money from the bank to further the personal interests of certain individuals and companies related to the bank".

Nkuhlu said it was not just KPMG that needed to change but the auditing industry as a whole‚ which had lost the trust of the people it aimed to serve.

The auditing firm has been embroiled in a number of scandals recently. The firm will also extend a review of its past work to stretch back 18 months and set up a hotline for employees to raise concerns about the quality of KPMG's work, he said.

KPMG woes deepen on VBS scandal