KPMG top exec suspended as new scandal threatens to engulf the audit firm
- The current head of KPMG's largest business unit has been suspended.
- Sipho Malaba was the lead independent audit partner on VBS Mutual Bank, which has been placed under curatorship.
- Some R900m of the bank’s reported deposits of R2.9 billion cannot be confirmed.
KPMG has suspended the head of its largest business unit, who was the lead audit partner on VBS Mutual Bank.
Sipho Malaba was tasked with running KPMG's largest business unit, financial services auditing, in October last year, when the embattled firm announced its new executive team.
With that new team, KPMG had sought to restore "public trust and rebuild" itself after its disastrous association with the Gupta family, and its involvement in a discredited report into a so-called rogue unit at the SA Revenue Service. Malaba, who served on the previous executive committee, was also asked to lead the firm's strategic projects.
But for years, Malaba was KPMG’s lead audit partner on VBS, which was placed under curatorship last month. According to a new report from the SA Reserve Bank (SARB), R900m of the bank’s reported deposits of R2.9bn cannot be confirmed. The firm only had liquid assets of R24 million.
Malaba signed off the independent auditor's report on the bank’s accounts until July 2017. The SARB says the bank experienced liquidity challenges for at least the past 18 months – the bulk of which was during KPMG’s watch.
KPMG confirmed to Business Insider South Africa on Wednesday that Malaba has been suspended.
In response to questions, which included an unconfirmed accusation that Malaba received a loan from VBS, KPMG spokesperson Nqubeko Sibiya said the firm "is investigating the matter in full cooperation with the curator [the audit firm SizweNtsalubaGobodo] of VBS Mutual Bank".
"Pending the outcome of the ongoing investigation the VBS audit partner has been suspended. As the investigation is ongoing, it would be inappropriate to comment further at this time."
VBS Bank granted former president Jacob Zuma a mortgage near the end of 2016. This enabled him to repay the R7.8 million taxpayer money which was spent on his private homestead at Nkandla.
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