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Two KPMG partners resign after facing disciplinary charges

16 April 2018

The South African Reserve Bank in March placed small lender VBS under curatorship because of liquidity issues.

Business Insider reported on Thursday that KPMG suspended Sipho Malaba, the head of the group's financial services auditing unit, and the person responsible for signing off on the VBS Mutual Bank financial statements. The disappointment and anger in the firm following revelations relating to VBS was "palpable".

Barclays Africa spokesman Songezo Zibi said the bank had requested additional quality assurance from KPMG in 2017 and its status as the bank's external auditor remained under review pending the outcome of investigations by the audit and accounting regulators.

The organisation said it was first sent a report of a reportable irregularity from KPMG on 11 April 2018.

As Malaba and Tshuma were intimately involved in the audit of VBS Mutual Bank, I will be writing to Mr. Nkhulu tomorrow to request that he reveal whether either former partner had any financial relationship with VBS Mutual Bank, or any of its investors, the nature of that relationship, and whether any unlawful benefit accrued to either of them.

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Nedbank CE, Mike Brown confirmed that one of the executives who resigned was KPMG's lead engagement partner on the bank's audit. The CEO of the IRBA, Bernhard Agulhas, has responded that this will, indeed form part of their investigation.

IRBA will then conduct a preliminary investigation and the Director of Investigations will decide whether or not to refer the matter to the Investigating Committee.

KPMG's spokesperson Nqubeko Sibiya told Fin24 on Friday that internal investigations are still ongoing.

Microsoft is investigating the methods partner KPMG uses to crack down on the illegal use of its software in India, after a complaint from a senior member of the BJP, documents seen by Reuters showed.

She says it's unfortunate that the resignations were tendered before disciplinary action could be taken.

Two KPMG partners resign after facing disciplinary charges