JOHANNESBURG: Barclays Africa Group , South Africa’s second-biggest lender by market value, dropped KPMG as its joint auditor on Thursday, joining a host of local clients breaking ties with a company caught up in scandals. The decision will test South African regulators’ conviction that the big four auditing firms are key pillars of financial stability, and raises further questions about the survival of the local unit of the global accountancy business. Barclays, one of KPMG’s major financial customers, joins more than 10 other clients including the South African government and broker Sasfin in breaking ties with KPMG South Africa.
The auditor has struggled to retain clients since 2017 due to work done for a company owned by the Gupta family - who have been accused of using their links to former president Jacob Zuma to amass wealth — and more recently for small lender VBS Mutual Bank.
The Guptas and Zuma have denied any wrongdoing.
KPMG’s own investigations found flaws in work it did for the Gupta family and the national tax agency. It has said it is cooperating with authorities and addressing its shortcomings.
The latest scandal, in which a top KPMG auditor failed to disclose a loan from a small bank he was auditing, was the last straw for Barclays Africa, whose board had proposed a month ago that KPMG be reappointed as its joint auditor along with EY at a shareholder meeting later this month.
“Subsequent to the release of our AGM notice, the board has carefully evaluated the on-going and more recent developments and decided that it is no longer able to support the reappointment of KPMG,” the bank said in a statement. — Reuters
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