Nedbank gives KPMG the chop

Each centimetre of credibility the post-State Capture KPMG SA management has attempted to claw back in the rehabilitation of the firm’s battered reputation continues to be thwarted by endless setbacks.

Just two weeks after Business Leadership SA lifted the suspension of KPMG’s membership, the firm took a lead role in the public release of Advocate Terry Motau’s sensational report into the plundering of VBS bank.

And then, on Monday, Nedbank Group Limited and Nedbank Limited announced it was rotating KPMG out the door. KPPG’s contract ends on 31 December 2019.

Daily Maverick has also reliably learned that KPMG is vacating its head office located in Parktown, Johannesburg. The building will be offered for rent from 1 November.

Before KPMG SA made yet another cameo in Motau’s “The Great Bank Heist” report, the firm announced that Chief Executive, Nhlamulo Dlomu, would be vacating her post only a year into her tenure. Dlomu is to take up a global role alongside KPMG Global chair Bill Thomas and the global management team.

“Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimise prospects of rebuilding trust,” a KPMG statement read.

Responding to the Nedbank ditching, KPMG released a cool riposte saying the decision “is part of the industry-wide move towards mandatory audit firm rotation, which seeks to ensure objectivity and robust auditing services are provided to all public interest entities”.

KPMG SA executive Chairman, Professor Wiseman Nkuhlu, responded:

“It is always disappointing to lose a client, but we remain very proud of the work that we have performed for Nedbank over many years, and of the diligence and professionalism of the team who served them.”

He added that KPMG itself was a “very different business from a year ago” as major changes had been introduced. These included governance and leadership, the client roster, quality as well as culture and ethics.

“I am confident we are taking the right steps and that this is being recognised by clients,” said Nkuhlu.

He said the firm’s readmission to membership of BLSA was “a welcome recognition of the changes we are making and has bolstered our determination to continue taking all measures to restore trust in the firm”.

KPMG has haemorrhaged clients since it was implicated in State Capture through its work for Gupta entities.

Those who have dropped KPMG SA include Barclays Africa, ABSA, Sasfin, the Auditor General of South Africa, Wits, Foschini, Munch Re, Hulisani, Sibanye Stillwater and Redefine Properties. DM