KPMG South Africa has announced that the company Chief Executive Officer, Nhlamulo Dlomu will be replaced barely one year after taking charge. The CEO who assumed the position after the company cleared out many senior officials who were linked with the high-profile Gupta scandal.
KPMG SA Chairman, Wiseman Nkuhlu will now take over the affairs of the shattered firm on an interim basis pending the appointment of a substantial CEO outside the company’s structure.
The South African arm of the global accounting firm released a statement which indicates that the company is now scouting for a new chief executive to take reins of the brutally maligned company. The company’s connection and an alleged conspiracy with the Gupta family and former South African president, Jacob Zuma has affected the company’s reputation in the country.
During Nhlamulo Dlomu’s time in office, some of KPMG South Africa’s regional offices were locked and hundreds of staff laid off after one of KPMG’s biggest client cut ties with the company. In the past few months, the company has been under investigation by South Africa’s Independent Regulatory Board for certain gross irregularities.
“Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimize prospects of rebuilding trust,” KPMG South Africa said in an official statement.
KPMG South Africa is now looking forward to a new beginning after its top officials were accused of courting the Guptas family and conspiring with them to syphon money from the public treasury. In the wake of the allegation, the company was also ensnared in another national scandal that rocked the South African Revenue Service (SARS) after investigations showed how KPMG feigned a report for the agency to corner corruption cases.
So far it has been a rather turbulent adventure for KPMG in the rainbow nation, having lost more than 20 listed audit clients since the incident broke out in 2017. Finbond Group Limited and Gold Fields both opted for KPMG arch-rival, Deloitte and PwC respectively while Witwatersrand University, Rainbow Minerals, Munich Re, and Interwaste have also ended a business relationship with the auditing behemoth.
Earlier this year, the South African auditor-general announced the termination of extant contracts with the company. This decision to terminate auditing contracts meant the company would no longer be allowed to audit at any level of government.
No doubt, the Guptas corruption scandal led to a huge loss for the company, but efforts are in top gear to rebrand through a new leadership structure after having lost many clients including Barclays SA.
It’s more than a year, the corruption scandal has left an indelible mark and the company is still picking up its pieces. But its waning influence in the auditing sphere might see it move closer to an exit door in South Africa if the situation isn’t properly addressed.