KPMG said on Wednesday, October 3, its chief executive in South Africa would step down one year after being appointed to restore the auditor’s reputation, which was badly tarnished by its role in the country’s corruption scandals.
KPMG said Nhlamu Dlomu would be replaced by someone from outside the firm who would take over rebuilding the company’s business in the country, while Ms Dlomu would move to a “global role” in KPMG.
KPMG lost major South African clients over revelations last year about its work for companies associated with the Guptas, a business family accused of using their friendship with former president Jacob Zuma to sway state decisions.
The scandal triggered the departure of several partners, including Ms Dlomu’s predecessor, and forced job cuts as the firm’s business in South Africa dried up. KPMG has since apologised and repaid fees from Gupta-related work.
“Given the scale of reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive outside the firm, with strong industry experience, will optimise prospects of rebuilding trust,” KPMG said. The firm faces an uphill battle to win back clients amid the continued public fallout in South Africa over the Guptas, who left the country when Mr Zuma was forced out as president earlier this year.
KPMG also remains controversial in South Africa over its role in a restructuring of the revenue tax service, which was seen as an attempt by Mr Zuma’s allies to capture the service. The collapse this year of VBS, a mutual lender, also compounded criticism of KPMG: the company had given the bank a clean audit, while partners on the contract had had conflicts of interest.
“Although it has been challenging, we have managed to stabilise the business,” Ms Dlomu said. “I look forward to sharing the South African experience with the global body of KPMG, and I’m pleased to be able to continue to support the firm during the transition,” she added. KPMG said the search for a new South African head was “well advanced.”