KPMG SA says two partners resign after facing disciplinary charges

Monday, 16 Apr, 2018

Information relating to VBS would be considered within the next month at the next audit committee meeting, he said.

As Malaba and Tshuma were intimately involved in the audit of VBS Mutual Bank, I will be writing to Mr. Nkhulu tomorrow to request that he reveal whether either former partner had any financial relationship with VBS Mutual Bank, or any of its investors, the nature of that relationship, and whether any unlawful benefit accrued to either of them.

The South African Reserve Bank in March placed small lender VBS under curatorship because of liquidity issues. Despite their resignation, the investigation by KPMG will proceed.

On the VBS work, "the disappointment and anger is palpable", said Nhlamu Dlomu, chief executive officer of KPMG South Africa. Standard Bank was awaiting the outcome of the Bowmans investigation before deciding on its future relationship with KPMG, said group financial director Arno Daehnke.

Although not flagged by KPMG during its audit, VBS's curator, SizweNtsalubaGobodo's Anoosh Rooplal, has uncovered a number of related-party transactions between VBS, related companies and staff.

The focus will now turn to whether Malaba and Tshuma were given loans on "soft" terms, whether they had in fact begun paying the loans back, and whether the quality of the audit had been compromised as a result of accepting the loans.

"If there are any matter required to be reported to the authorities, we'll do so".

This is the latest blow to hit the big four firm, which on Sunday announced a raft of additional measures aimed at restoring public confidence in the quality of its audit work.

Dlomu admitted KPMG had lost clients amounting to "less than 10%" of its client book as well as losing a number of partners that resigned to move on to other firms in the wake of the revelations that came to light in September a year ago.

She says it's unfortunate that the resignations were tendered before disciplinary action could be taken.