KPMG explanation of Gupta wedding audit 'unconvincing and inadequate': Corruption Watch

web_photo_KPMG_01072017

KPMG logo seen on a building.

KPMG logo seen on a building.

web_photo_KPMG_01072017

KPMG logo seen on a building.

KPMG logo seen on a building.

JOHANNESBURG - Corruption Watch welcomed an investigation into auditing firm KPMG by the Independent Regulatory Board for Auditors (IRBA), for allegations of improper conduct related to the #GuptaLeaks.

The industry watchdog said it would probe KPMG's 2014 audit of Linkway Trading, a company allegedly involved in the Gupta wedding scandal.

KPMG was accused of passed off wedding expenses as business costs.

The latest round of leaked emails suggested that taxpayers' money was laundered away from a government dairy project in the Free State, via a shell-company, to pay for the R30-million Gupta wedding held at Sun City in 2013.

In a statement on Tuesday, Corruption Watch said supposedly respectable companies often facilitated and sometimes benefited from unethical and often illegal flows of cash.

"These companies are equally culpable when they are aware of such illegal transactions and fail to raise any concerns. 

"KPMG has been previously accused of bending the rules to satisfy its client, notably in relation to, having issued a flagrantly misleading and biased report smearing then Minister of Finance, Pravin Gordhan, the alleged ‘rogue unit’ within SARS," Corruption Watch said.

KPMG denied wrongdoing and said it would co-operate fully with the IRBA.

WATCH: Kgosana wants to clear his name amid Gupta claims

Corruption Watch said the auditing firm's explanation on whether its audit of the Gupta company revealed any money laundering, was "unconvincing and inadequate."

"Equally damning is the scathing indictment of international consulting group McKinsey’s complicity, outlined in the Budlender report, regarding their agreement to sub-contract 30 percent of their Eskom work to Trillion under the guise of 'supplier development'. 

"This is in spite of their denial of having worked on any projects on which Trillian worked as a sub-contractor to Eskom," the statement said. 

On Monday, reports emerged that under the leadership of Eskom’s chief financial officer Anoj Singh, the power utility irregularly and illegally paid R266-million to Trillian Capital, a company owned by Gupta lieutenant Salim Essa.

Budlender’s report on Trillian Capital found the company had not conducted any work for Eskom and therefore the R266m appeared not to have been earned.

READ: KPMG denies involvement in Gupta wedding scandal

The report also alleged Trillian Chief Executive Eric Wood told global consultancy McKinsey he would discuss with Singh a contract that would result in Eskom appointing Trillian for a project that was out to tender.

This was despite Trillian failing a risk assessment conducted by McKinsey on Eskom’s behalf, due to the political connections of its majority shareholder, Essa.

"McKinsey’s unwillingness to co-operate with the Budlender investigation resonates loudly," Corruption Watch said.

Corruption Watch said it was consulting its lawyers regarding McKinsey’s business dealings with Eskom, to assess whether to refer their conduct to the criminal justice authorities of both South Africa and the US.