Cape Town – KPMG allowed themselves to be used for the factional battles of the ANC – and that’s a tragedy, said Bonang Mohale, CEO of Business Leadership South Africa (BLSA) on Thursday.
Speaking to Fin24 on the sidelines of BLSA’s signing of an employment creation and economic growth “pact” with South Africa in Cape Town, Mohale said the disgraced auditing firm let themselves, South Africa and the auditing profession as a whole down.
On September 22, BLSA’s board announced that it suspended the membership of KPMG SA, pending the outcome of an independent investigation into the auditing firm’s involvement in conduct related to state capture in South Africa.
Mohale said KPMG became party to the project of state capture, which has harmed our South Africa, victimised individuals and damaged the reputation of business.
“This happened at a time when South Africa’s financial services are heralded, celebrated and highlighted as absolutely the best in the world – where the number one, two and three spots in banking belonged to South African companies.”
Fin24 earlier reported that South Africa dropped 14 places in the World Economic Forum’s (WEF’s) Competitiveness Index. The erosion of South Africa’s institutions was one of the most damning findings in the index, with the country's rankings sliding significantly.
The index rated South Africa’s institutional environment, financial markets and goods market efficiency weaker than last year.
Mohale said the resilience of South Africa’s financial services were demonstrated in the 2007 and 2008 global recession and South Africa was by and large “untouched” by it.
“But now we have to look at 3 500 to 3 800 good men and women of moral standard and ethical conduct – wholesome and upright people working for a company (KPMG) they’re not entirely proud of,” Mohale said.
Mohale said KPMG should have raised alarm bells when it was paid R23m to produce a report for the South African Revenue Service (SARS), but it looked the other way.
“This (the payment) was disproportionate and SARS used this to chase the finest among us, such as Pravin Gordhan (former finance minister). But they kept quiet,” Mohale said.
BLSA subsequently also suspended Transnet and Eskom as members of the organisation for their involvement in corruption and state capture.
Mohale said South Africans have been rightly disturbed in recent times over the numerous allegations of corrupt behaviour and colossal failures of corporate governance and accountability at both Eskom and Transnet.
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