Head of KPMG South Africa steps down after one year, following corruption scandal
KPMG South Africa said today it was searching for a new chief executive from outside the company, after its current boss stepped down after just 12 months in the role.
The professional services firm has seen its reputation in the country devastated by its involvement in a series of corruption scandals, which have seen it lose a swathe of major clients.
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Current chief executive Nhlamulo Dlomu, who was promoted within the company after its management was cleared out following the scandal, will be shifted into a role focused on ethical leadership and culture.
In a statement, KPMG said: “Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimise prospects of rebuilding trust.”
The company found itself at the centre of a corruption scandal in South Africa over its involvement with a company owned by the Gupta family – close allies of the country’s former president, Jacob Zuma.
The Guptas, who have fled the country since Zuma’s fall, have been accused of using their friendship with the former leader to influence the award of government contracts, something they have denied.
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KPMG South Africa lost several partners and clients during the fallout from the scandal, cutting hundreds of jobs and shutting regional offices to cope with the loss of business.
It also took a reputational blow for its role in restructuring South Africa’s tax agency.
In September last year, the firm released the results of a lengthy investigation into its own practices, saying there were several areas where it had found behaviour “that fell considerably short of KPMG’s standards”. It added that it had found no wrongdoing by partners or staff.
In April, South Africa’s auditor general said the country would terminate all government contracts with the firm, a blow that was compounded further by KPMG giving a clean audit to VBS, a mutual lender, which later collapsed.
KPMG said it was already “well advanced” in its search for a new South Africa boss.