An internal report found that the firm had missed warning signs in the audits of Gupta-controlled companies.
It did not find any evidence of illegal behaviour or corruption by KPMG partners or staff but it did unearth “work that fell considerably short of KPMG’s standards”.
In a statement released today, Veihmeyer said, “This is not who we are.”
He added, “KPMG South Africa made serious mistakes and errors of judgement in these engagements.
“The work on these specific engagements is not reflective of the quality of KPMG’s work in South Africa over many years, or indeed the work we do for clients globally.
“As a first step, significant actions were taken last Friday including the appointment of Nhlamu Dlomu as the new CEO of KPMG South Africa. She immediately issued an apology to the country. Nhlamu represents the best of KPMG, and has proven to be a strong and effective leader.”
In further negative news for the firm, two clients, a South African broker (Sasfin) and an energy investment business (Hulisani), have both dropped KPMG this week citing reputational risk.
More significantly, from a financial perspective, banking and asset management group Investec is also reviewing its relationship with KPMG South Africa and is expected to make a decision later today.
The internal investigation also found significant problems with a controversial report the firm produced for the South African Revenue Service (SARS).
Yesterday SARS commissioner Tom Moyane said the agency would report KPMG to finance minister Malusi Gigaba because he wants him to blacklist the firm for its “unethical” and “unlawful” behaviour. And South Africa’s ruling African National Congress party said it wants KPMG to account for “its involvement in what appears to be politically motivated immoral and unethical conduct”.