Ex-KPMG auditor faces six charges over Gupta wedding scandal

Ex-KPMG auditor faces six charges over Gupta wedding scandal

Jacques Wessels will be charged for inappropriate conduct and tax evasion after working on the books of businesses owned by the Gupta family

Following scrutiny over the 2013 Gupta wedding, an investigation was launched into Wessels’ conduct as an ex-KPMG auditor.

Charges for inappropriate conduct and tax evasion have been instituted by the Independent Board of Auditors (IRBA). Wessels had resigned from KPMG in September 2017 before the Big Four firm could launch a disciplinary against him.

Wessels audited Gupta-owned Linkway Trading accounts, which was allegedly used to divert funds allocated to the Vrede dairy project to pay for the R30m bill which the family wedding racked up.

Linkway Trading’s main business was construction but it also organised the wedding, which Wessels was a guest at.

The disciplinary hearing into Wessels’ actions highlighted a strange money trail between businesses owned by the Gupta family.

The IRBA’s closing arguments aimed to show that the ex-KPMG auditor was “grossly negligent” and lacked diligence in managing the accounts.

The multi-million wedding bill for the marriage of Vega Gupta and Aakash Jahajgarhia amounted to 55 percent of Linkway Trading’s total revenue.

The money was paid into Linkway’s account by Accurate Investment, an company based in Dubai.

Wessels had initially claimed Linkway had a loss of R6.9m because of the wedding. This loss was originally recorded as an operating expense in financial statements but later the company restated it as cost of sales.

Subsequently Wessels was charged with evading tax by misstating the loss of R6.9m.

Advocate Azhar Bham, Wessels’ legal representative, claimed he did not deliberately attempt to hide wedding expenses as suggested by the IRBA. All he admitted was that Wessels should have been more sceptical of the whole affair.

Chair of the hearing, Advocate Alan Dodson, however, discovered from the IRBA that there was “significant risk” in Linkway’s revenue which Wessels clearly failed to look into.

Bham countered the argument to say Wessels was just ignorant and never meant to act untruthfully.

The IRBA said Wessels pleaded guilty to contravening auditing regulations regarding the wedding transaction and failed to meet carry out his responsibilities as an auditor.

Since the scandal erupted, KPMG South Africa have lost multiple high-profile clients.

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