CW weighs in on KPMG and McKinsey’s alleged involvement in Gupta-related business dealings

Corruption Watch strongly endorses the investigation by the Independent Regulatory Board for Auditors into allegations of improper conduct of auditing firm KPMG, in particular its 2014 audit of Linkway Trading, the company alleged to be involved in the related Free State dairy and Gupta wedding scandals.  Essentially what is alleged is that public money under the control of the Free State agricultural department was diverted from the Gupta-linked local company to Gupta-linked accounts in Dubai and then back to South Africa where it was used to pay for the R30-million Gupta wedding.

In its work focusing on illicit financial flows, Corruption Watch has long established the role of supposedly respectable companies who facilitate and sometimes benefit from such 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.

The explanation given by KPMG on whether its audit revealed money laundering in the movement of cash from the Free State provincial government, via the controversial dairy project, to bank accounts in the United Arab Emirates and back to Gupta business accounts in South Africa, is 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% 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.

McKinsey’s unwillingness to co-operate with the Budlender investigation resonates loudly. Corruption Watch is currently 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.

Contact:

Phemelo Khaas:            phemelok@corruptionwatch.org.za          083 763 3472