Barclays Africa sacks KPMG amid alleged South African corruption links

Barclays Africa today withdrew its recommendation to reappoint KPMG as one of two joint auditors.

The move is the latest chapter in a saga which has seen the Big Four accountant's South African arm become embroiled in a conduct scandal.

In mid-April South Africa's auditor general stripped KPMG of all its central contracts amid allegations of wrongdoing by some of the firm's partners.

Barclays Africa had previously warned it would "monitor developments" as reports emerged of KPMG's connections with the Gupta family.

The Guptas, friends of former South Africa president Jacob Zuma, have been subject to reports of dubious business dealings – allegations they strenuously deny.

In a statement the lender said today:

Barclays Africa Group Limited (BAGL) today notified its shareholders that its board of directors is withdrawing its recommendation that auditing firm, KPMG Inc. (KPMG) be reappointed for 2018 at its upcoming Annual General Meeting (AGM) on 15 May.

KPMG's UK arm is the group auditor of Barclays. It is understood today's announcement will not affect its ability to continue in the role.

Meanwhile, a spokesperson for KPMG's South African business noted this morning's announcement.

"We are disappointed by, but fully accept, the decision," the person said.

We are very proud of the work that we have performed for Barclays Africa Group over many years, and of the diligence and professionalism of the team who served them.

We have implemented far-reaching changes over the past seven months to all aspects of the firm including governance, quality, and risk management. Work to further underpin the quality of our services and integrity of our professionals continues.

We are confident the steps we are taking to change the firm are the right steps to restore trust in KPMG, and we remain resolute in our determination to achieve this goal.

[contf] [contfnew]

CityAM

[contfnewc] [contfnewc]