Standard Bank sticks with KPMG, McKinsey and SAP

Johannesburg - Standard Bank is continuing to use the services of three companies that are under public scrutiny, despite evidence that all of them have been involved in corruption.

“South Africans are, rightly, very concerned by the evidence of serious and widespread corruption in our country,” the bank said, adding that auditing firm KPMG had taken insufficient action to restore its reputation.

“Guided by the SA Reserve Bank, we are concerned to prevent systemic risks to the stability of the financial system that might arise from replacing a large financial services group’s auditors without a carefully planned transition,” the bank added.

Regarding management consulting firm McKinsey, the bank said it was “gravely concerned about allegations” levelled at the company, arising from its dealings with Gupta-linked firm Trillian, as well as Eskom and Transnet. And, said the bank, it was aware of the allegations that software corporation SAP made an improper payment to secure a contract with Transnet.

Standard Bank added that it would make a decision regarding its relationships with McKinsey and SAP.

KPMG stands to lose a significant portion of its business in the country if the government blacklists it from all state-related work. According to responses submitted to Parliament, which City Press is in possession of, the auditing company had 3 948 government-related projects over the past three years. This work earned it R1.732bn, including VAT, which equates to an average of R577m in annual fees.

Last month, Finance Minister Malusi Gigaba called on government and state entities to review all work that KPMG had done.

National Treasury spokesperson Mayihlome Tshwete said it was up to each department and state-related client of KPMG to make its own decision about retaining the firm’s services.

At least eight private sector KPMG clients have dropped the auditor.

And this week, Bloomberg reported that KPMG’s unit in Botswana was being sued by the liquidator of a failed bank.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
15.29
-0.2%
Rand - Pound
20.61
-0.1%
Rand - Euro
17.31
-0.1%
Rand - Aus dollar
10.92
-0.1%
Rand - Yen
0.13
-0.4%
Gold
1,842.49
-0.0%
Silver
23.84
-0.6%
Palladium
2,145.18
-0.1%
Platinum
1,023.51
-0.9%
Brent Crude
86.27
-1.9%
Top 40
65,653
0.0%
All Share
72,164
0.0%
Resource 10
71,479
0.0%
Industrial 25
90,959
0.0%
Financial 15
14,713
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot