Sasfin Fires KPMG in Wake of South African Gupta Scandal

JOHANNESBURG (Capital Markets in Africa) – Sasfin Holdings Ltd., a South African financial-services company, said it’s firing KPMG LLP as its independent sponsor and searching for a new auditor, becoming the second company to announce it has dumped the firm because of work it did for the politically connected Gupta family.

The decisions were based on “the well-publicized concerns recently raised with regard to KPMG,” Johannesburg-based Sasfin said in an emailed statement on Tuesday. Deloitte & Touche LLP has been chosen as a sponsor, which provides advice and services related to a company’s listing on the Johannesburg Stock Exchange. The role as Sasfin’s auditor, which KPMG held for the past 18 years, has also been put out to tender, it said.

Eight top executives at KPMG’s South African office quit on Friday after it was implicated in an accounting scandal linked to the wealthy Gupta family, who are friends of President Jacob Zuma and stand accused of looting billions of rand while exerting undue influence over the state. The country’s biggest banks including Barclays Africa Group Ltd., Standard Bank Group Ltd., Nedbank Group Ltd. and Investec Ltd. have said they’re scrutinizing their relationships with KPMG.

“We note KPMG’s announcement and will continue to engage with them on this matter,” Old Mutual Plc, Africa’s biggest insurer, said on Tuesday. The London-based company is talking with KPMG “at the highest level.”

Sygnia Ltd., a Cape Town-based money manager, terminated KPMG’s services in July. Chief Executive Officer Magda Wierzycka said on Thursday that others may follow suit but that getting rid of an auditor and finding a new one was not an easy process. The Institute of Directors in Southern Africa has suspended co-branding activities with KPMG, including sponsorship of its golf day.