KPMG in fresh ‘scandal’ accusation in Botswana
The company has been accused by a liquidator of overseeing possibly the 'biggest accounting scandal in the history of Botswana'.
The front of the Sunday Standard yesterday.
Botswana paper Sunday Standard published an article over the weekend suggesting that audit and advisory firm KPMG may not only have some explaining to do for its conduct in South Africa.
The article reports that a liquidator of Kingdom Bank Africa (KBAL), John Little, has “accused KPMG Botswana of misconduct in signing off the books of the bank which collapsed two years ago and has filed a lawsuit of close to P200 million [R262 million] against the accounting and auditing firm on behalf of creditors”.
The bank was reportedly liquidated in 2015 due to insolvency after an audit assigned by Bank of Botswana uncovered the apparent R262 million “mismatch between assets and liabilities”.
Little has accused KPMG of covering up the bank’s solvency problems since 2010, incorrectly signing them off as a going concern. The paper reported that the matter, if Little is correct, could turn out to be the “biggest accounting scandal in the history of Botswana”.
In court papers the Standard saw, Little claimed that KPMG Botswana had “acted negligently in breach of its contract by failing to report the true situation to either the management of KBAL or to Bank of Botswana” and KPMG had “not qualified its audit opinion or indicated that the going concern assumption was incorrect”.
“In the premises, in conducting the audit for the year ended 31 December 2013 and in conducting the audits for the prior years, KPMG Botswana acted negligently and accordingly breached the terms of its contract with KBAL,” Little was quoted as saying in his papers.
He also alleged that KPMG had failed in its duty to report the true financial situation of KBAL to management, which ultimately meant steps could allegedly not be taken in time to rectify the bank’s declining financial situation.
The Bank of Botswana, in his view, would have been given more time to be able to revoke KBAL’s licence or taken a number of other steps to ensure that it “recovered sufficient assets to pay off liabilities” had KPMG acted as it was meant to.
KPMG’s Nigel Warren-Dixon apparently issued a statement that it would be “business as usual at the Botswana office” despite KPMG SA’s reputation troubles following a controversial report about the SA Revenue Service and work it had done for the Gupta family.
Read the full story from the Sunday Standard here.
