The South African Communist Party (SACP) Gauteng today, 16 October 2017 held a successful picket outside audit firm KPMG’s Johannesburg head office. This was to protest and condemn the multi-national company for the role it played in facilitating and supporting Corporate Capture of the State by the Gupta family.
KPMG provided corrupt audit and accounting services to the Gupta linked companies and to the SA Revenue Services (SARS) on the so-called Rogue Unit, a report they finally withdrew and apologised for. In their services to the Gupta linked companies and SARS, KPMG applied the most corrupt, unethical, immoral and bankrupt auditing practices.
The SACP believes that as a direct result of their activities to legitimise and provide cover to the corrupt activities of the Guptas, KPMG has undermined South Africa and plunged it into deep economic crisis. It is because of this immoral and corrupt relationship between KPMG and the Guptas that the country is now suffering the consequences of junk investment rating.
In a country that already has a high rate of unemployment, severe poverty, and inequalities amongst the highest in the world, the working class and the poor are left more vulnerable when the economy’s rating is downgraded.
Corporate Capture of the State has undermined the proper functioning of our State Owned Enterprises (SOE’s) and undermined the integrity and the oversight role of National Treasury and SARS as key institutions that are the custodians of our public purse. These institutions have always played a crucial role to guarantee good governance and compliance with the constitution and the laws of our country.
South Africa’s economy is almost in recession, and growth forecasts indicate that the economy will not grow at the most appropriate levels to meet the needs of the working class and the poor. Whilst our tax base is very low due to low economic growth, our instruments such as bonds are not selling in the financial and credit markets. As a result SOE’s that were corrupted by KPMG cannot raise money, leading to workers’ pensions being threatened as they are now being looked at as alternative funds to finance the same SOE's.
The SACP believes that KPMG committed crimes against our economy and the people. They are responsible for further depressing the economic environment in our country.
The picket was in protest against the role of KPMG’s activities including the following:
- Firstly, KPMG supported a Gupta company at the centre of all dealings and transactions that constitute the core of Corporate Capture of the State. KPMG provided audit and financial services to the listing of the Gupta Company known as Oakbay Resources Limited. KPMG made sure that the share price was fixed and manipulated to ensure successful listing by this Gupta Company. It gave legitimacy to the share price that was certainly not worth the paper it was written on. This would have helped Oakbay Resources and Energy Limited to raise capital at the JSE.
- Secondly, KPMG provided accounting and auditing services to the Gupta linked acquisition of Optimum Coal Mine from Glencore. KPMG supported the negotiations influencing the acquisition price to the benefit of the Guptas.
- Thirdly, KPMG manipulated information to package a set of accusations and allegations to discredit former Minister of Finance, comrade Pravin Gordhan. KPMG falsely claimed that Gordhan should have known and actually knew, and was therefore responsible for the so-called Rogue Unit at SARS. This has been proven a fabrication and was withdrawn.
- Fourthly, KPMG senior partners and managers attended the scandalous and controversial Gupta wedding at Sun City in Rustenburg. This was the wedding that saw our national sovereignty being undermined with wedding guests landing at the military airbase in Waterkloof. We believe the KPMG guests were invited as a reward in recognition of their role in facilitating the Corporate Capture of State institutions.
All these events and activities of KPMG triggered a series and chain of events that led our country being rated junk investment by the rating agencies. Rating agencies relied on issues such as governance, political stability, poor state of SOE's amongst many other factors, at the core of which is corporate capture facilitated by KPMG.
The SACP thanks and congratulates all institutions (public and private) for severing ties with KPMG. We must encourage patriots and those loyal to our county and democracy to drop KPMG with immediate effect. We must warn any institution and company that is still doing business with KPMG that they are accomplices and equal partners in waging economic genocide and sabotage against our economy. We will mobilise the working class to expose and protest any institution that is party to Corporate Capture of the State.
We call on KPMG to close shop and go back to their Imperialist masters. Their presence in our country is a source of grave pain and bad memory.
Issued by SACP