22/09/2017 11:30 SAST | Updated 22/09/2017 11:31 SAST

KPMG Booted Out By Business Leadership SA

The company is party to state capture, and it is has hurt our country, says BLSA.

The KPMG logo is seen at the company's head offices in Parktown, Johannesburg, South Africa, September 15, 2017. REUTERS/Siphiwe Sibeko
Siphiwe Sibeko / Reuters
The KPMG logo is seen at the company's head offices in Parktown, Johannesburg, South Africa, September 15, 2017. REUTERS/Siphiwe Sibeko

Business Leadership South Africa (BLSA) has suspended audit firm KPMG's membership of the business umbrella organisation and called for an independent investigation into the company's involvement in state capture.

This follows events of the last week in which the firm disavowed parts of a controversial report into SARS, the operations of the High-Risk Investigations Unit (HRIU) and various other alleged irregularities. KPMG International ordered a large-scale clearing out of the South African operations' leadership while the board chairperson flew from London to see Pravin Gordhan, the fired former minister of finance.

According to Kate Johns, BLSA spokesperson, the decision to suspend KPMG's membership follows a period of thorough engagement between BLSA CEO, Bonang Mohale and new KMPG South Africa CEO Nhlamulo Dlomu. "They have been afforded the opportunity to present their case and explain events," Johns said.

She says BLSA wants an independent investigation by institutions like the the National Prosecuting Authority. "There have been some discussions (with authorities) but nothing concrete is on the table."

KPMG spokesperson Nqubeko Sibiya wasn't immediately available for comment.

"BLSA recognises the considerable steps announced by KPMG to change its leadership and commence a process of cultural change. It cannot, however, look past the gravity of their conduct which is completely inconsistent with the values of BLSA, contained in our Integrity pledge. We must live by example, and that starts with our own members," BLSA says in a statement.

"We are deeply concerned by the unethical and unprofessional conduct that KPMG engaged in in South Africa. The firm became party to the project of 'state capture' which has harmed our country, victimised certain individuals and damaged the reputation of business," the statement quotes Mohale.

"BLSA believes the situation calls for an expeditiously managed independent inquiry, and full disclosure on the part of KPMG, to uncover the extent and role of individuals involved in the state capture project. Anyone found to be in breach of the law should be prosecuted.

"Corruption is unacceptable wherever it shows its face, and business should never be party to the widespread corruption in all levels of government and in state-owned enterprises. KPMG will do society a considerable service if it assists in this process through full participation in an independent inquiry."