The Foschini Group drops KPMG as auditor
South African retailer The Foschini Group (TFG) has dropped KPMG, the global accountancy firm ensnared in a scandal involving business friends of President Jacob Zuma, as its external auditor, citing “concerns recently raised“.
TFG on Monday confirmed that it had joined consumer goods group AVI and a handful of other companies in cutting ties with KPMG.
KPMG’s own investigation had found flaws in work it did for the national tax agency and the Gupta family, accused of using links with Zuma to win government contracts.
The Guptas and Zuma deny wrongdoing and say they are victims of a politically motivated witch-hunt. The Guptas and their companies have not been charged with any crime.
TFG, which owns the Foschini clothing chain and Britain’s Phase Eight and Whistles, said on Monday that it has appointed Deloitte & Touche to take over as auditors for the current financial year.
“The change in audit firm, which is effective immediately, was initiated by the company following the concerns recently raised regarding KPMG,” TFG said in a statement.
State-controlled Telkom decided it would not award any new business to KPMG South Africa until the investigation by the Independent Regulatory Board for Auditors (IRBA) has been concluded, the fixed-line operator said in a statement.
KPMG is also at risk of losing some its big financial clients, with Barclays Africa, Old Mutual, Investec, Standard Bank and Nedbank considering their options.
The auditing firm’s new South Africa chief executive, Nhlamu Dlomu, has sought to reassure clients, employees and lawmakers since her appointment last month after most of the leadership was cleared out.
Dlomu on Monday announced a new executive team to replace vacancies left by the resignation of her predecessor and seven other executives.
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