KPMG South Africa aims for recovery in new CEO appointment

KPMG South Africa aims for recovery in new CEO appointment

It is hoped that hiring ex-PwC joint deputy chief executive, Ignatius Sehoole, will help the firm get back on track after a flurry of scandals this year

Former executive president of the South African Institute of Chartered Accountants, Ignatius Sehoole, will replace current CEO Nhlamulo Dlomu in May next year.

With the new hire, KPMG South Africa hopes to rebuild its reputation following a number of corruption scandals.

These included accusations that KPMG South Africa were caught up in a corruption scandal surrounding the powerful Gupta family.

The firm was accused of facilitating the Gupta family in tax evasion and corruption and while KPMG denies wrongdoing, it did admit at the time to missing red flags in the family’s accounts. At least eight senior employees resigned including the CEO Trevor Hoole.

As if this wasn’t enough, earlier in 2018 it came to light that KPMG South Africa may also have been involved in scandal at VBS Mutual Bank.

As it was about to collapse, it was discovered that nearly R2bn ($137m) had been siphoned out of the bank due to corrupt activities at the lender.

KPMG partner, Sipho Malaba, who had been working on the VBS audit was discovered to have obtained very substantial borrowings which were not declared to KPMG.

At the time, a total of 53 people were charged by the Democratic Alliance party of South Africa with fraud, corruption, bribery, and racketeering, including Malaba.

Previous leaders at KPMG South Africa were fired as a result of these scandals erupting.

Sehoole will take over the local operation for KPMG in South Africa on 1 May 2019, where he hopes to win back client trust.

Sehoole told the Financial Times: “My priority at KPMG will be to continue to restore client confidence and again make KPMG a place where the best people work.”

Under Dlomu, the South Africa branch of the firm suffered incidents which harmed its reputation and caused floods of clients to leave, so the hope is that Sehoole will offer a fresh start.

Dlomu will step down and, in the interim before Sehoole joins next May, professor Wiseman Nkulu will continue as the executive chairman and will then go back to the role of non-executive chairman next year.

Nkulu told City A.M: “While KMPG South Africa has changed substantially over the past year, the challenges facing both KPMG and the profession have intensified.

“With this in mind, the board felt it was important to appoint an external candidate to the firm with strong industry credentials.”

The incoming CEO has had a varied and successful career. He joins KPMG from his role as deputy chief executive officer at PwC South Africa. He has also worked in leadership roles at MTN Group and Fedics Foods.

He served two terms, from 2000 to 2009, in the role of executive president of the South African Institute of Chartered Accountants.

Sehoole has also joined a large number of non-executive director roles over the course of his career, including of Harith General Partners, the Pan-African Infrastructure Development Fund, Gold Fields Operations Limited, and PPC Ltd.

He has Bachelor’s degrees from the University of South Africa, Vista University, and the University of South Africa Foundation.

Top accounting firms are not having an easy ride when it comes to scandal, fraud, and corruption.

Back in June 2018, Big Four competitor Deloitte faced disciplinary action over fraud in the Autonomy accounts.

KPMG UK was also fined and reprimanded this year as a result of breaching ethical standards in its audits of Ted Baker.

Resources & Whitepapers

How to optimise your compliance lifecycle

How to optimise your compliance lifecycle

4m
The new rules of accounting

The new rules of accounting

4m
5 ways internal productivity can boost your profitability

5 ways internal productivity can boost your profitability

4m
Crushing the Four Barriers to Growth

Crushing the Four Barriers to Growth

4m

Related Articles

Exclusive: Interview with Sir Donald Brydon – “That can’t happen again” - Part 2

Audit Exclusive: Interview with Sir Donald Brydon – “That can’t happen again” - Part 2

1w Chris Jewers
Apprenticeships shaping future of business

Big Four Apprenticeships shaping future of business

3w Laura Keen
Exclusive: Interview with Sir Donald Brydon – "Last chance saloon" for audit

Accounting Firms Exclusive: Interview with Sir Donald Brydon – "Last chance saloon" for audit

3w Chris Jewers
Audit industry stalemate shows signs of shifting

Audit Audit industry stalemate shows signs of shifting

4w Chris Jewers
Deloitte pursues KPMG over audit of Goals Soccer Centres

Audit Deloitte pursues KPMG over audit of Goals Soccer Centres

1m Chris Jewers
FRC extends Thomas Cook investigation to more statements audited by EY

Accounting Firms FRC extends Thomas Cook investigation to more statements audited by EY

2m Chris Jewers
The top UK accounting scandals of 2019

Big Four The top UK accounting scandals of 2019

3m Shannon Moyer
PwC review finds M&C Saatchi accounting errors totalling £11.6m

Big Four PwC review finds M&C Saatchi accounting errors totalling £11.6m

3m Shannon Moyer