Sygnia fires KPMG

Magda Wierzycka CEO of asset management company Sygnia is no stranger to the media and is outspoken on the subject of fees and the layers of fees that investors are charged by the industry.

However over the last six months the diminutive CEO has crossed the line from investment and finance into unchartered waters of corruption, misuse of public funds, the great Net1/Sassa rip off, state capture and the assault on the National Treasury and the Reserve Bank.

Last month she announced Sygnia’s new money market unit trust and said the firm will donate 100% of the management fees earned on the fund to non-political organisations fighting corruption, both in the public and the private sector.

This week she went a step further announcing that Sygnia had fired its external auditor KPMG for its alleged role in state capture, according to this article in the Mail & Guardian.

“We are living through unprecedented times in South Africa where politics and economics have converged – one completely dependent on the other,” she said this week at the AHI SME Indaba in Cape Town.

“We are living through times when we are witnessing a battle between all that is good and decent in South Africa, and all that represents greed, corruption and economic destruction.”

What is happening, and what is affecting business among others, transcends the politics of one party. It is a battle for the soul and the future of South Africa. Do we survive as a democracy or descend into an autocratic kleptocracy? she asked.

“If the right things do not happen in the next five months, no number of short term strategies are going to lead to a flourishing economy and job creation. We are at a cross-road. And yet, I have been amazed at just how complacent most people are. Complacency, even just pessimism, is a comfort zone.

Following Clem Sunter’s high road, low road theme, she used the address to outline her views on the alternative scenarios facing SA. The low road she said, is already in play. To change track requires business, civil society organisations, trade unions, community organisations and opposition parties to unite, taking a strong stand against the moral corruption of the current government and the business sector that aids and abets that corruption (among other requirements).

But corruption is already becoming a way of doing businesses. “We have already seen international companies such as KPMG, McKinsey, SAP, Bell Pottinger, be it through commission or omission, looking the other way or not asking the right questions – implicated.”

KPMG was exposed in the Gupta emails for its role as the auditors of the Guptas’ Linkway Trading, the Mail & Guardian said. Linkway diverted government funding that was earmarked for the Gupta-linked Estina dairy project in the Free State, to cover the expense of a lavish family wedding.

KPMG also allowed Linkway to account for the wedding as a business expense, so no tax was paid on the Free State government funding, according to the Mail & Guardian.

Sygnia asked hard questions of KPMG about its business with the Gupta family to ascertain how it could have missed “a big money-laundering exercise”.

“The meeting didn’t dispel, in my mind, the perception that adequate oversight was not exercised,” Wierzycka told the Mail & Guardian.

She said Sygnia believed there remained many unanswered questions on KPMG’s relationship with the Gupta-related businesses, according to the article.

“We are at a cross-roads – but we are not helpless! We have a very narrow window of time to stand up and be counted. Those that do, will be remembered,” she said this week.

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