Sasfin Holdings End their 18-year Relationship with KPMG amid Gupta Scandal

Monday, September 25, 2017 Print Email
Sasfin Holdings, a banking and financial services group based in South Africa, has recently made an announcement with regards to removing KPMG as its auditor. This decision of the South African based company resulted in the end of their 18-year relationship with the big four firm KPMG. The South African company based their decision of replacing KPMG on ‘well-publicised concerns,’ as KPMG is facing flak for the audit work it performed for the Gupta family and the separate report that KPMG produced for the South African Revenue Service.

Sasfin, a company listed on the Johannesburg Stock Exchange, has made an announcement on  September 19 of removing KPMG as its auditor along with changing KPMG services as its independent sponsor, which deals with the company’s stock exchange announcements. It is expected that the company will replace KPMG services with Deloitte & Touche Sponsor Services as its official independent sponsor.

Sasfin has said that the reason behind the decision was to ensure separation of duties and avoid conflict of interest which arises from KPMG being the company’s joint external auditor as well as its independent sponsor.

Sasfin also said that considering all the well-publicised concerns that have recently been raised regarding KPMG’s audit work and Sasfin’s responsibility of good governance with reference to auditor independence and tenure, Sasfin has made the decision of putting its audit for tender.

Grant Thornton and KPMG have been joint external auditors of Sasfin for 30 and 18 years’ respectively. The audit tender process for selecting the new auditor for Sasfin is expected to commence in November of this year.

On September 15, 2017, Trevor Hoole, chief executive of KPMG South Africa, resigned from the firm along with the chairman and the chief operating officer. In addition to the above mentioned resignations by key personnel, five senior partners also departed from the firm after an internal investigation was conducted into the work carried out by the firm on behalf of the Gupta’s and a report that was prepared for the South African Revenue Service.

KPMG has said that while the internal investigations did not brought any evidence of corruption or illegal behaviour by partners or staff at KPMG, this investigation did brought to our attention that the work in consideration fell considerably short of the standard set by and at KPMG.

Source: ReadyRatios

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