CAPE TOWN: Telkom SA SOC Ltd., South Africa’s largest landline operator, won’t award any new business to KPMG LLP’s local unit pending the outcome of an investigation into the firm by the country’s accountancy body.
Any contracts underway with the auditor and consulting firm will be completed and their expiration dates will stand, the Pretoria-based company said in an email to all staff seen by Bloomberg. A further decision will be made when the probe by the Independent Regulatory Board for Auditors into work for the politically connected Gupta family has been concluded. The news was first reported on Monday by Johannesburg-based Business Report. “The recent media reports surrounding KPMG South Africa and allegations around the conduct of some of its employees have been met with great concern,” the phone-services provider told staff. “Telkom conducts a substantial amount of business with KPMG and has taken the events very seriously.” The IRBA started its investigation after KPMG released the findings of an internal report into work done for the Guptas, who are friends with President Jacob Zuma and have been accused of wielding undue influence over state contracts and cabinet appointments. The firm’s probe found that the work fell “considerably short” of its own standards. The Guptas and Zuma have denied wrongdoing, while KPMG’s investigation didn’t find evidence of illegal behavior or corruption. “We appreciate the fact that Telkom will wait until the investigation by the IRBA has been concluded,” KPMG spokesman Nqubeko Sibiya said in an emailed response to questions. “We ask our clients and the public to wait for the outcome of the IRBA investigation and the independent inquiry.”
