KPMG South Africa facing legal action

South Africa’s tax agency on Monday accused KPMG of “unethical” and “unlawful” behaviour and said it plans to take legal action against the global auditor. It relates to a report carried out by the firm that suggested the former finance minister ran a rogue unit to spy on political leaders – as Kate King explains.

KPMG’s South African leadership may have left the building

but its problems aren’t going away.

On Monday the country’s tax agency said it plans to

take legal action against the auditing firm.


“Instituting legal proceedings against KPMG for reputational damage to SARS, including but not limited to a civil claim.

It comes after KPMG released details of a confidential report it had compiled for the tax office.

That document was used in a police investigation which saw former Finance Minister Pravin Gordhan ousted.

The global auditor now says it contained ‘flaws’.

But South African’s Revenue Service says the company had no right to make the information public

and wants the company blacklisted.


“It is quite amazing for us and shocking because as a tax administration of a magnitude as SARS, cannot be pushed into a situation where in the reports that we are commissioned can be seen to be doubted upon and we take action without full accountability. KPMG should be held accountable.”

The legal action is another blow for KPMG, which on Friday apologised

after an internal investigation criticised the company’s conduct in auditing companies controlled by the wealthy Gupta family,

which is friends with President Jacob Zuma.

It’s South African CEO, chairman and six other managers quit as a result..

KPMG says it will donate to charity the $3 million dollars it earned in fees from the Gupta’s

and the 23 million it got for carrying out the controversial report.

But restoring credibility globally, may cost a lot more.