Johannesburg - Being associated with KPMG amid the Gupta and SARS scandals, played a significant role in Sasfin’s decision to part ways with the firm after almost two decades together, Sasfin Group CEO Roland Sassoon told Fin24 on Tuesday.
Independent banking and financial services group Sasfin on Tuesday announced that it has dropped KPMG as its JSE sponsor as well as its auditor after 18 years over concerns over good governance stemming from the Gupta saga and its fumble on the SARS "rogue unit" report.
Sassoon said it was a combination of two factors which convinced the firm to review its relationship with KPMG – the Gupta scandals and the good practice of rotating auditors.
KPMG and Grant Thornton were joint auditors of Sasfin for a significant time. Grant Thornton has a 30-year relationship with the firm, and KPMG came on board when Sasfin received a banking license.
Sassoon explained that back then it was a requirement that one of the big four auditing firms had to audit a South African bank. After putting it out to tender, KPMG was selected.
“They have been outstanding auditors, and we’ve developed a really good relationship with KPMG. And they've become too close to us.”
He said it was good corporate governance to change your auditors every now and again.
“But obviously the other factor that we have taken into account, is this whole scandal per se that is going on with KPMG and the Guptas.”
He said the constant barrage of concerning press reports, as well as KPMG's statement it issued on Friday played a significant role in its final decision. “We see that Pravin Gordhan wants to sue them and that SARS is next in line [to sue them].”
Sassoon said he was aware that the firm had not been found guilty of anything, and that even the report of the Independent Regulatory Board for Auditors (IRBA) was not concluded. “But we also had to make a decision, and with all that has been going on, we felt now would be a good time to put it out to tender.
"We don't have a problem with KPMG, but obviously we are concerned. We don't want to be tainted.”
Although Deloitte & Touche Sponsor Services will audit KPMG from Tuesday, Sassoon said they hope to have concluded the tender process by November.
Sasfin is the second corporate to cut ties with KPMG after fintech company Sygnia terminated KPMG’s services in July. The Institute of Directors in Southern Africa has also suspended co-branding activities with KPMG, including sponsorship of its golf day.
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