BREAKING: Embattled Auditing Firm KPMG Appoints Professor Nkuhlu And Ramalho

PICTURE: Business Day

Embattled auditing firm KPMG announces the appointment of Professor Wiseman Nkuhlu as Chairman of the Board and Ansie Ramalho as Independent Director of the Board, marking further progress in strengthening the governance and leadership of the firm, Communications Manager Nqubeko Sibiya said in a statement. 

Prof Nkuhlu, the country’s first black chartered accountant, as chairman of the board as the company tries to restore its credibility after becoming embroiled in the controversy around the wealthy Gupta family last year.

The appointment comes after Ahmed Jaffer resigned from the firm and stepped down as chairman last September during an exodus of KPMG partners after the company withdrew reports it had compiled on behalf of the Guptas, widely criticised for wielding undue influence on the government, and for the South African Revenue Service (Sars), which it said fell short of its standards.

In all, eight partners stepped down, including Trevor Hoole as chief executive and Steven Louw as chief operating officer.

Nkuhlu, currently chancellor of the University of Pretoria, has over 30 years’ experience in both the public and private sectors. 

He has served as a board director and as part of the audit committee at a wide range of leading public listed companies. Nkuhlu was also an economic advisor to former president Thabo Mbeki.

KPMG also appointed Ansie Ramalho as an independent director, saying she and Nkuhlu would assume their roles on March 1.

KPMG South Africa chief executive Nhlamu Dlomu said the appointments would bring a huge amount of relevant experience, wisdom and challenge as the firm makes the critical decisions required to rebuild.

“Prof Nkuhlu, as the first black chartered accountant in the country, has dedicated his life and his career to the role of the profession in supporting South Africa’s economic progress and transformation agenda,” Dlomu said.

“As an authority on corporate governance … Ramalho’s expertise will also be invaluable to the board.”

The Independent Regulatory Board for Auditors said last week one of the lines of investigation into KPMG was nearing completion while others were  progressing satisfactorily.

According to Business Analyst Khaya Sithole, “[t]he appointment of Prof Nkuhlu is a good strategic move by KPMG. His reputation in the field is well-established and he brings a sense of stability to the board that was previously lacking.”

“However, one has to keep in mind that KPMG has not been particularly forthcoming with the details of their complicity in the SARS matter and what exactly prompted them to retract their report,” Sithole said. 

The auditing firm cleared former finance minister Pravin Gordhan and withdrew its findings from a South African Revenue Service (Sars) report into the so-called rogue unit.

Sithole said KPMG – under the leadership of Prof Nkuhlu must improve its governance and accountability.

“Prof Nkuhlu then has to ensure that under his stewardship, KPMG improves its governance and accountability processes in a manner that can restore confidence in the firm and the brand. If he is unable to do this then his appointment would he meaningless,” he added. 

The firm has been facing challenges since last year following its involvement in channelling R30m of taxpayers’ money to fund the infamous 2013 Sun City Gupta wedding.