Joel Muckett 10 Oct 2017 10:45am

Telkom freezes new contracts with KPMG South Africa

KPMG South Africa has been dealt another blow as Telkom announced it is suspending all new contracts with the Big Four firm

The partially state-owned telecommunications giant said that existing contracts with the KPMG would continue but that new business would not be considered until an investigation by the Independent Regulatory Board for Auditors (IRBA) was completed.

In addition, yesterday South African retailer TFG became the latest client to drop KPMG. It announced that it had appointed Deloitte instead due to “concerns recently raised”.

The IRBA began its investigation after an internal KPMG probe found “red flags” had been missed in the firm’s work for the Gupta family, who are connected to President Jacob Zuma.

The findings triggered resignations from most of the local senior management team, including former chief executive Trevor Hoole.

Nhlamu Dlomu succeeded Hoole as chief executive, and earlier today announced the new executive team including the new audit practice head Gary Pickering, the interim chief operating officer Andrew Cranston and head of risk Brian Stephens along with six others.

“This is day one for the new KPMG, a KPMG where public interest will share an equally important role with enhanced governance, quality and ethics,” she said.

Last week, Dlomu apologised to a parliamentary committee for errors made by the auditor during their work for the Gupta family, and said she was “determined” the firm would not repeat the same mistakes.