Following the controversy surrounding the Guptas relationship with the South African president, professional service company KPMG has severed its business ties with the Gupta business empire. The Guptas are allegedly at the heart of what has been termed “state capture”.
KPMG handled the auditing for all Gupta-owned and controlled businesses among other services they rendered to the Guptas.
Their decision to terminate their business contract with the family follows last month’s claims by Deputy Finance Minister Mcebisi Jonas and former ANC MP Vytjie Mentor that the Guptas offered them top cabinet positions while the president stood and watched.
An email was circulated to staff and partners to this effect as KPMG Southern Africa CEO Trevor Hoole said they have to see the greater good in ending their business relationship with the Guptas despite the financial and other consequences that might follow. Hoole wrote thus:
“The recent media and political interest in the Gupta family, together with comments and questions from various stakeholders … has required us to evaluate the continued provision of our services to this group.”
“We have decided that we should terminate our relationship with the group immediately,”
“I can assure you that this decision was not taken lightly, but in our view the association risk is too great for us to continue.
“It is with heavy hearts that we have reached our conclusion, and there will clearly be financial and potentially other consequences to this, but we view them as justifiable.”
This decision was not taken lightly as KPMG consulted extensively with local regulators, clients, analysts, internally and also with its executive committee and policy board before reaching the conclusion.
Carel Smit, KPMG executive for clients and sectors, confirmed he was aware of this decision. However, Hoole said the matter was meant to be a confidential one between the company and their clients and hoped it will not be publicised.
Guptas owned Oakbay Investments confirmed on Thursday that KPMG is no longer the auditor for Oakbay Investments through an anonymous spokesperson.