KPMG to layoff 400 employees after scandal


The offices of auditors KMPG are seen in Cape Town, South Africa, September 19, 2017. Picture taken ...
The offices of auditors KMPG are seen in Cape Town, South Africa, September 19, 2017. Picture taken September 19, 2017. REUTERS/File Photo

In Summary

  • KPMG’s has been under close scrutiny since 2017 over work done for a company owned by the Gupta family.
  • They have been accused of using their links a former president to influence government decisions and the awarding of tenders.
  • The Guptas have however denied any wrongdoing.

Global auditor KPMG said it will axe up to 400 staff in South Africa in its latest shake-up following a corruption scandal in the country, which saw it lose several major clients.

The auditor has taken a number of steps since last September to help restore the reputation of its South African business, including changes to corporate governance and management and measures to improve risk management.

On Monday, the firm said it plans to have just four business hubs in South Africa – in Johannesburg, Cape Town, Durban and Port Elizabeth – and will appoint some executives from KPMG International to its South Africa’s board.

It will close small regional offices in Mbombela, Bloemfontein, Polokwane and East London, resulting in the lay offs, KPMG South Africa’s CEO Nhlamulo Dlomu said during a conference call.

KPMG’s South African unit has been under close scrutiny since 2017 over work done for a company owned by the Gupta family – who have been accused of using their links to former president Jacob Zuma to influence government decisions and the awarding of tenders – and more recently for small lender VBS Mutual Bank.

The Guptas and Zuma have denied any wrongdoing.

Dlomu said the offices that will close were quite dependent on audit work carried out for the Auditor General, who said in April that he would terminate all government contracts with KPMG following the scandals.

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