South African Revenue Service (Sars) Commissioner Tom Moyane on Monday announced a set of actions it is considering against KPMG, after the auditing firm withdrew its “rogue spy unit” report.
“Sars has been completely taken aback by KPMG’s aberrant and unethical conduct. KPMG unilaterally announced the purported withdrawal of its report despite the existence of a service level agreement governing the relationship between the parties [Sars and KPMG],” Moyane told a media briefing in Pretoria.
Moyane said the KPMG report, in law, belonged to Sars and the auditing firm had surrendered all rights to it to the revenue service.
“This abhorrent, unethical and unprofessional conduct by KPMG has left Sars with no option but to consider the following legal route: to institute legal proceedings against KPMG for reputational damage to Sars including but not limited to a civil claim; to report KPMG to the relevant statutory audit bodies both locally and internationally; to report KPMG to the minister of finance with the aim to blacklist KPMG for its unethical, unlawful, and illegal behaviour,” said Moyane.
He said Sars was considering the following routes, to fight the auditing firm: “Report KPMG to the minister of finance to consider stopping all work currently performed by KPMG in other departments as well as any work in the pipeline until all the work KPMG conducted for the State have been investigated and reviewed for quality and proper auditing and expected standards”.
Moyane said Sars might also “immediately seize any work which KPMG is currently performing for Sars and assess the work KPMG has performed in the last ten years with the aim to determine whether there was a value for money and whether Sars should demand its money”.
Lastly, the revenue service is also considering reporting KPMG to Parliament through Scopa, with “the aim to investigate the immoral conduct of KPMG and determine the appropriate action”, said Moyane.
KPMG last week announced that it had withdrawn its report on the work the audit firm did for Sars and on behalf of the Gupta family.
On Friday, KPMG South Africa appointed Nhlamu Dlomu as its new chief executive. Dlomu said that she was committed to restore the embattled audit firm’s fundamental values of ethics and integrity in a bid to salvage its credibility as she takes over the helm at a time of deepening crisis.
This came as Trevor Hoole tendered his resignation on Friday as the chief executive of KPMG SA, with chief operating officer and country risk management partner Steven Louw also stepping down. Five other senior partners of KPMG SA also decided to leave the firm.
KPMG SA would also be taking disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.
KPMG drew heavy criticism regarding the “Sars Report” it delivered after it was commissioned by the revenue service to investigate allegations of wrongdoing by an intelligence unit set up while Pravin Gordhan served as Sars commissioner.
Former finance minister Gordhan has welcomed the withdrawal of the controversial report.