17 September 2017

South Africa: DA Hands Over KPMG International's Statement to the Hawks to Assist With Ongoing Investigation Into the Guptas

Photo: KPMG/Wikipedia
KPMG logo
press release

The DA welcomes the investigation, conducted by KPMG International, into work performed on behalf of the Gupta family, which resulted in the purge of seven senior executives from KPMG South Africa.

The investigation into the audits of Gupta entities, including Linkway Trading (Pty) Ltd, a South African company, controlled by the Guptas, which was allegedly involved in tax evasion, established that:

"management of many Gupta entities responded misleadingly and inadequately to audit teams enquires about the nature of related party relationships and the commercial substance of significant unusual transactions"

The investigation also identified:

"a series of misrepresentations from the client over the period that KPMG South Africa provided tax advice."

This means that KPMG International, as well as KPMG South Africa, may have information that is vital to the investigation being conducted by the Hawks, into Mosebenzi Zwane, Atul Gupta, Ajay Gupta, Rajesh Gupta, Ronica Ragavan and Kamal Vasram for alleged:

racketeering, money laundering, assisting another to benefit from the proceeds of unlawful activities, and acquiring, possessing or using the proceeds of unlawful activities in terms of the Prevention of Organized Crime Act (No. 121 of 1998); and

submitting false, or untrue, tax returns in terms of the Tax Administration Act (No. 28 of 2011).

The investigation follows criminal charges laid by myself on 03 July 2017 after revelations that public funds, meant to assist the poor, were allegedly washed through a complex web of front companies, and used to pay for Vega Gupta and Aakash Jahajgarhia's wedding at Sun City in 2013

I have, therefore, furnished Major-General Zinhle Mnonopi with a copy of KPMG International's press statement released on 15 September 2017, which may assist in the investigation being conducted by the Hawks.

In the end, the investigation and the subsequent purge of seven senior executives, is unlikely to be enough "red meat" to stop the bleeding at KPMG South Africa, which now faces:

possible litigation from former Minister of Finance, Pravin Gordhan, for its role in the forensic audit into the SARS "rogue unit";

an investigation into what appears to have been a see-no-evil approach to auditing by the Independent Regulatory Board of Auditors; and

an investigation into its former clients for racketeering, money laundering, and submitting false or misleading tax returns, being conducted by the Hawks.

David Maynier MP

DA Shadow Minister of Finance

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