KPMG LLP, the auditor that shed clients and staff after scandals in South Africa, apologizes for its “misdeeds” and wants a second chance to reestablish its business in the country, Chairman Wiseman Nkuhlu said.
The firm, one of the so-called big four global auditing companies, confessed to publishing a misleading report on the South African Revenue Service that led to a police probe of a former finance minister, did work for the Gupta family who have been implicated in corruption scandals linked to former president Jacob Zuma, and acted as an auditor for a bank that collapsed due to alleged fraud. Its eight top staff resigned in September 2017, some of the biggest companies in South Africa have replaced it as their auditors and in June it said its workforce had shrunk to 2,200 from 3,400.
“KPMG had made a lot of serious mistakes and lost the trust of the public and clients,” Nkuhlu said in an advertisement placed in South Africa’s Sunday Times newspaper. “We had lost sight of our responsibility to serve the broader public interest.”
The company is one of a number of international firms that have apologized for their conduct during the nine-year rule of Zuma, which ended in February, during which time corruption at state companies became endemic. Bain & Co. has started an independent probe into its own work for South Africa’s tax service, while McKinsey & Co. and SAP SE have accepted responsibility for improper work done for state-owned companies.
“We know we made mistakes and we will accept responsibility, as appropriate, for our misdeeds,” Nkuhlu said. “In return, I would like to make an appeal to South Africa business, government and the public. An appeal for your recognition that KPMG South Africa is today a very different business to what it was 18 months ago.”
The company, which has lost clients including Barclays Africa Group Ltd. and Dimension Data Plc, is seeking to win back trust, he said.
We “appeal for your permission, for KPMG South Africa and the thousands of South Africans who work for it, to continue to play a positive role in the business community and the life of the nation,” he said.
South African prosecutors said Wednesday they would withdraw graft charges against some allies of former president Jacob Zuma due to lack of cooperation from Indian officials.
The national prosecuting authority (NPA) had alleged that $20 million (17.2 euros) of public money meant for poor dairy farmers in Free State province was syphoned off to the wealthy Gupta family, originally from India, and their associates.
The eight accused included a nephew of the three Gupta brothers, who are at the centre of allegations that Zuma oversaw a web of corruption while in power, with the Guptas awarded fraudulent government contracts. The other accused were former Gupta employees, the dairy director and three government officials. The three brothers were not charged.
"The investigators were working with Indian officials to gather information... the process has been slow, so information is not forthcoming as quickly as we had hoped," NPA spokesman Phaladi Shuping said.
The Gupta brothers left South Africa last year before police conducted a raid in their suburban home in Johannesburg. Prosecuting authorities, who were given until 30 November to formally charge the suspects, said they could re-instate the charges in future.
"We've taken the decision to withdraw provisionally," Shuping said. Earlier this year, the high court in Bloemfontein ruled that it was not satisfied that there was evidence connecting Gupta assets to the alleged scam.
"This is a reflection on the weakness of the prosecution authority," political analyst Daniel Silke told AFP.
"It does present a problem for President Cyril Ramaphosa in that opposition parties will clearly use this to accuse him of just paying lip service to the issue of fighting corruption. "But I don't think those allegedly involved can really rest peacefully yet."
Zuma was forced to step down in February as criticism grew from within the ruling ANC party over multiple corruption scandals. The opposition Democratic Alliance party said the reasons for dropping the charges were "flimsy at best, and wholly unconvincing".
South Africa will invest $1 billion in South Sudan’s oil sector, including in the construction of a refinery, the South African minister for energy and his South Sudanese counterpart for petroleum said on Friday.
South Sudan’s oil industry is dominated by Asian firms including China National Petroleum Corporation (CNPC), Malaysia’s Petronas and India’s Oil and Natural Gas Corporation (ONGC Videsh).
The two ministers signed a memorandum of understanding which will also involve South Africa taking part in the exploration of several oil blocks, the ministers said.
“When this refinery is complete, it will have the capacity of producing 60,000 barrels of oil per day,” said Jeff Radebe, South Africa’s minister of energy.
Ezekiel Lol Gatkuoth, petroleum minister for South Sudan, said the deal also offers avenues for cooperation in the construction of a pipeline to serve fields located in the south of the country.
South Sudan exports its crude through another pipeline that goes to a port in neighbouring Sudan to the north.
“It is instrumental to have a new a pipeline,” Gatkuoth said.
South African President Cyril Ramaphosa will pay back 500,000 rand (RM149,510) donated to his campaign fund by a firm with links to his son after admitting he misled parliament, an official said.
Ramaphosa has staked his reputation on fighting corruption after his predecessor Jacob Zuma was mired in graft scandals that finally led to his ousting earlier this year. Ramaphosa had told parliament that the payment in October 2017 was to his son Andile for consultancy work for Bosasa, a company that has contracts with government institutions.
But Ramaphosa later admitted it was a donation towards his own campaign last year to become leader of the ruling ANC party, a hard-fought battle in which he beat Zuma’s chosen candidate.
“The donation was made without his knowledge,” ANC official Zizi Kodwa told the SABC state broadcaster yesterday.
“He has decided voluntarily that he will pay back the said amount and he will call for further investigation on all donations that were made to the campaign.”
The main opposition Democratic Alliance party said Bosasa had won lucrative government contracts, adding “this looks suspiciously like all other ANC government corruption deals.”
A judicial inquiry is probing allegations that Zuma and some of his family members oversaw a web of corrupt government contracts.
The ANC and Democratic Alliance will face off in elections next May. — AFP
Thousands of Cadbury chocolates have been sold to the public despite being past their best.
The chocolate, some of it months beyond its best-before date, was sold at a major KwaZulu-Natal South Coast wholesaler, which supplies spaza shops and trading stores, including in rural Eastern Cape areas.
And tens of thousands of rands worth of short-dated chocolate was dispatched to wholesaler clients hidden among newer stock.
These claims were made in the labour court in Durban last week.
It was alleged that ambitious sales targets led to massive overstocking in wholesalers.
Most resulted in multimillion-rand returns across KwaZulu-Natal of popular Cadbury brands, including Dairy Milk slabs and Lunch Bars.
A food health expert emphasised there was no risk in eating chocolate past its best-by date.
But a legal expert questioned the ethics of selling such products without clearly informing consumers.
The matter came to light when a sacked sales representative, Hans van Tonder, took his former employer, Diplomat Distributors, to court, claiming he had been victimised and that his dismissal was “automatically unfair”.
Mondelez SA, owners of Cadbury, contracts Diplomat, a logistics company, to distribute its products to wholesalers.
Diplomat fired Van Tonder in April 2016 for gross dereliction of duty after a company hearing found an instance where he failed to timeously report that chocolate at a Port Shepstone client was nearing its best-by date.
But Van Tonder produced emails that show Diplomat had been told by the client that it had been receiving stock with “mixed expiry dates”, which he argued was outside his control.
“It is a major concern as the inner stock on the pallet is short-dated,” wrote a buyer for the wholesaler, who asked what would be done to eradicate the problem.
Van Tonder, who had represented Cadbury products for 16 years, produced a dossier in court, including national stock return figures, emails and other documents which allegedly pointed to widespread problems with overstocking and short-dated stock.
Van Tonder was fired over a R21 835 loss to Diplomat at the Port Shepstone wholesaler.
This was the value of chocolate that had to be removed from the wholesaler in early 2016 after it had past its best-by dates, as well as money spent discounting and promoting the chocolate in a late bid to sell it.
A witness for Van Tonder told the court the R21 835 was “like chalk and cheese” compared with returns of hundreds of thousands of rands of Cadbury chocolate from many other wholesalers across the country.
Shadrach Chinniah, who resigned as a Diplomat rep in October 2016, said: “I thought it was absolutely ludicrous he was dismissed for R21 000 and my store had [old stock worth] R310 000 … why didn’t they dismiss me?”
He told the court a Diplomat manager “cleared” the R310 000 in minibars from a major Durban wholesaler “after it expired”.
The court heard the minibars failed in the marketplace nationally and the line was discontinued.
Chinniah alleged there were:
. Cover-ups by management;
. A lack of support for markdowns to move short-dated stock; and that
. Short-dated stock was hidden among newer stock before delivery, making it hard for merchandisers and reps to keep tabs on best-by dates.
Placed before the court were photographs that were said to show pallet loads of chocolates, all of which were beyond their best-by dates, “being sold on special” at the same Port Shepstone wholesaler, months after Van Tonder’s dismissal.
The pictures, apparently taken in June, show marked-down PS chocolates that had expired on May 25 2016 and Lunch Bars that had expired on April 25 2016.
However, these claims were not examined.
Early on the second day of the hearing, Bongani Khanyile, attorney for Diplomat, applied for the matter to be sent to the Commission for Conciliation, Mediation and Arbitration (CCMA).
He argued Van Tonder was seeking relief for an “automatically unfair” dismissal but had not made a case for this.
Judge Benita Whitcher agreed it was an “ordinary unfair dismissal case” rather than one that involved arbitrary discrimination and ruled her court would not sit on the matter.
An emotional Van Tonder stormed out of the courtroom.
“Three years of this,” he shouted. “They have been lying. I am going to go outside and break down.”
Whitcher later gave a written order directing the CCMA to expedite the matter.
No order was made for costs.
Yinon Ben Anat, chief executive of Diplomat SA said: “Diplomat’s policy is clear in that we do not purchase or sell expired stock [beyond its best-by date].”
He did not comment on claims of overstocking and declined to give details on Diplomat’s contractual relationship with Mondalez.
City Press sent Mondalez a list of questions on overstocking and its policy on the sale of best-by goods. The company declined to comment, saying the matter was before the courts.
“Mondelez SA abides by local legislation and we are focused on bringing the highest-quality products to our consumers,” it said.