I can even bet that he would rather invest in a sterling reputation than in bitcoin. He is reported in a recent Sunday Times interview to have said that if the intention of KPMG is merely to use his stature and reputation to appease stakeholders and stem the loss of clients, “they are making a big mistake. I value my reputation, that’s all I have. There is no way I can be compromised,” he added.
Our world would be a hugely different one if more corporate and political leaders had the same attitude.
Nkuhlu seems to be asking all the right questions of KPMG’s alleged conduct in regard to allegations relating to state capture. It remains to be seen if he will be given all the answers in a complete and honest way so that he can, in turn, advise the company on honest, transparent steps to take to begin a credible reputational climb back.
Everything it has done thus far, including the rapid strategic amputation of the previous CEO and some implicated executives, is tantamount to placing plaster on a festering wound. There should be no room for spin doctors in the auditing world.
An additional question one should ask, however, is to know how far back Nkuhlu will be allowed to cast his probing eye if he is to be in a position, one day in the future, to stand on a public platform without flinching and – mindful of his sterling reputation – tell us and the world that all is good at KPMG.
Will he be allowed to ask all the right questions, for instance, about the work done by KPMG when it reportedly helped cover up the theft of billions of rand by the late Brett Kebble through JCI from Randgold & Exploration?
Chris Barron writes in the Sunday Times that “KPMG took conflict of interest to new heights when it audited JCI (the thief), Randgold & Exploration (the victim), and the two alleged main recipient companies of the proceeds of the thefts, Western Areas and Investec. It was also the forensic investigator in the Scorpios’ investigation of the thefts.”
Barron continues: “… from 2005 to 2016 while KPMG was its auditor, JCI never published any annual financial statements that complied with the Companies Act or the International Financial Reporting Standards regulations; nor has KPMG recorded any reportable irregularities, as auditors are obliged to do”.
On such omissions and failures, Nkuhlu has this to say: “The audit profession globally is in deep trouble. The slide began when it started combining its auditing functions with advisory work. Its understanding of public as opposed to self-interest has become blurred. The values, attitudes and behaviour are not as clear-cut as they should be.”
This discussion is important in our times because of growing public concerns, justified or not, that:
- Corruption in the private sector is always shielded and perpetrators are allowed to get away scot-free;
- The language often used to describe private sector corruption is less harsh than that used for public sector corruption, almost portraying the former as “mistakes”;
- Sympathisers of firms like KPMG are always at pains to remind us of the “many good people who work there”, almost trying to shut up all criticism of the collusion with state capturers. Such sympathy is hardly ever shared when the corruption happens in the public sector.
Is the auditing profession due for a large-scale revamp?
One shudders to think what might fall out of the cupboards if forensic probes covering the past ten to 15 years were to be done in the conduct of all major auditing firms, not just KPMG; especially since they started housing auditing and advisory services under the same roof and, in the process, mixing the proverbial church and state.
Would the JCI/Randgold & Exploration scenario be an exception to the rule, or has it become the norm over time?
In cases where public sector entities have been clients – particularly, but not exclusively, since the onset of the Zupta-led state capture – we should ask to what extent auditing firms have had to either master the art of looking the other way when corruption was being committed, or actively aided, abetted, and benefited from the diversion of public funds into the private bank accounts of politically collected individuals and entities.
So far, we know what we know but we do not know how much more there is to know, as much of the evidence might have been destroyed by now.
So, given his unblemished track record and impressive appreciation of reputation as the most valuable currency of our times, should Wiseman Nkuhlu be joining KPMG as the man to hold its hand in an attempt at a probable reputational climb back, or should he take off his gloves and head to the Independent Regulatory Board of Auditors to make sure it acts more transparently and wields a bigger stick against recalcitrant members, irrespective of their size?
South Africans are, on the whole, tired of corruption, irrespective of where it happens. But corruption that consists of weakening and repurposing key state institutions in order to easily divert public funds away from their intended purposes borders on treason and should be dealt with accordingly.
Private companies that seem prepared to greedily trade the only currency that matters, brand and corporate reputation, in exchange for lucrative state contracts in a country with massive levels of poverty and unemployment deserve even less sympathy from the public.
No amount of spin doctoring and strategic amputation should serve as an excuse for the entire truth to be withheld from the public. Failure to do the right thing will create fertile ground for extreme left-wing opportunists for whom civil unrest is the only political vehicle to popularity.
South Africa deserves better.