IDC appoints new auditors after dumping KPMG

Cape Town - The Industrial Development Corporation of South Africa (IDC) announced the appointment of new external auditors.

This follows the decision taken at its annual general meeting not to reappoint KPMG, which had previously audited the IDC, it stated in a notification sent out by the JSE.  

"[Th]e IDC appointed SizweNtsalubaGobodo Inc (SNG) and Ngubane & Company (Ngubane) as joint auditors for the financial statements ended 31 March 2018."

It added that the decision was made after an open tender procurement process.

KPMG suffered a severe blow for its report into the SA Revenue Service (SARS) intelligence unit, which was incorrectly dubbed the “rogue unit”. This report, which came at a price tag of R23m, was seemingly used by suspended tax boss Tom Moyane to purge senior officials. Parts of the report have since been retracted.

The audit firm also played a key role in the Guptas' acquisition of Shiva uranium mine with a loan from the IDC, which the controversial family failed to repay.

KPMG experienced an exodus of its clients with the Auditor General terminating its contracts with the firm to audit the public sector. Sibanye Stillwater [JSE:SGL], ABSA Bank of Barclays Group Africa [JSE:BGA] and Redefine Properties [JSE:RDF] are among the clients that dropped KPMG’s services as an independent external auditor.

Meanwhile, Finance Minister Nhlanhla Nene said changes to legislation would allow the Independent Regulatory Board of Auditors (IRBA) to be more robust in holding auditors to account, reported Fin24. 

"Collusion between auditees has cast a bad light on auditors and tarnished the reputation of the profession," Nene told Parliament on Tuesday while tabling his budget vote.

"Amendments to the bills include aligning regulation to international best practice and ensuring expeditious resolutions to inquiries into the sector."

KPMG came under intense scrutiny after two audit partners resigned in April when it was revealed that they had multiple loans with VBS Mutual Bank, while being involved in the institution’s 2016/2017 financial statements.

The company announced then that it will review all work done in the last 18 months, in light of the VBS saga, including that partners will undergo a lifestyle audit.

IRBA and the South African Institute of Chartered Accountant (SAICA) are both probing KPMG’s handling of Gupta accounts and the SARS report that led to several top executives resigning from KPMG last year.

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