NEWS

Ferial Haffajee: Malusi Gigaba Ignores The Elephant In The Room In His KPMG Statement

The finance minister doesn't once mention how KPMG’s rogue unit report enabled the capture of Sars.

22/09/2017 14:22 SAST | Updated 22/09/2017 14:49 SAST
Siphiwe Sibeko / Reuters
Malusi Gigaba.

Comment
It's great that Finance Minister Malusi Gigaba has stepped in to comment on the growing KPMG crisis, but he has spectacularly missed the point.

Gigaba has instructed all government and public agencies to review their accounts with KPMG and to ensure audit processes have not been compromised.

But in a 340-word statement, Gigaba does not mention the central problem once -- and that is how KPMG's report on the SA Revenue Service (Sars) enabled capture of that institution by special interests who needed its former leadership out of the way.

In fact, Gigaba does not mention Sars at all in his statement, even though the agency reports to him. Neither does the minister mention the Gupta family, who is at the heart of the crisis at KPMG because there are burning questions about its audit of the family's various companies.

Gigaba does not mention the central problem once and that is how KPMG's report on the SA Revenue Service enabled capture of that institution by special interests.

Sars boss Tom Moyane this week threatened KPMG with court action since he has used its report to flush out a full band of executives from the revenue authority.

Former finance minister Pravin Gordhan slated the original KPMG response even after it fired almost its entire C-suite after an internal investigation, and then retracted the Sars report into an alleged rogue unit.

On Thursday, KPMG International's global chairperson, John Veihmeyer, met with Gordhan and former deputy finance minister Mcebisi Jonas in a further effort to stamp out a snowballing scandal for the company, which has lost clients almost daily this week.

Gordhan, the business community and civil society are pushing KPMG for full disclosure of its internal investigation. The issue has shone light on a growing problem at Sars, which is collecting less revenue than ever before (this can be attributed in some but not all measure to a weak economy) and refunding taxpayers more slowly than ever.

KPMG's dance macabre with state capture and corruption is not reflected in Gigaba's statement at all.

On Friday, Business Leadership SA suspended KPMG's membership of the organisation, which is a corporate kiss of death. KPMG's dance macabre with state capture and corruption is not reflected in Gigaba's statement at all. Instead, the minister blames the problem on dominance in the sector, a lack of transformation in the auditing community and the failure of big companies to rotate their auditors often enough.

These are vital issues, but they are not central to what has been revealed about KPMG and how it failed South Africa.