KPMG admits partners took undisclosed loans from VBS

A pirated compact disc of Microsoft’s Windows 10 can be bought for around $2 in New Delhi

Sipho Malaba and Dumi Tshuma had been facing disciplinary charges over VBS Mutual Bank.

As Malaba and Tshuma were intimately involved in the audit of VBS Mutual Bank, I will be writing to Mr. Nkhulu tomorrow to request that he reveal whether either former partner had any financial relationship with VBS Mutual Bank, or any of its investors, the nature of that relationship, and whether any unlawful benefit accrued to either of them. The South African Reserve Bank placed VBS into curatorship four weeks ago, and announced the launch of a forensic investigation into the affairs of the institution on Friday. If the two partners who quit need to be reported to the country's authorities following the KPMG probe, the firm will take those steps, she said. The allegations against them included their failure to comply with the firm's policies and procedures regarding the disclosure of relevant financial interests, KPMG South Africa said in an emailed statement on Saturday.

"This is shocking and disappointing for us", Dlomu said. "There can be no tolerance, however, of any conduct that compromises our reputation and we have moved decisively to deal with the situation".

Nkuhlu said it was not just KPMG that needed to change but the auditing industry as a whole‚ which had lost the trust of the people it aimed to serve. The disappointment and anger in the firm following revelations relating to VBS was "palpable". "We say for 60 days‚ every one - partner or associate director of KPMG - must see that there is a secure line that they can report those things‚" Nkuhlu said.

The firm will now undertake a review of hundreds of files going back as far as two years to reassure its clients of the quality of its audits.

The auditing firm has been embroiled in a number of scandals recently.

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