Simnikiwe Hlatshaneni
Premium Journalist
2 minute read
23 Sep 2017
5:15 am

KPMG facing legal action from former Sars employee

Simnikiwe Hlatshaneni

Johan van Loggerenberg resigned from Sars after the auditing firm's report of a 'rogue unit' implicated him.

Pedestrians walk past the KPMG Offices on Empire Road in Johannesburg on 15 September 2017. Picture: Yeshiel Panchia

Auditing firm KPMG is facing possible legal action from former South African Revenue Service (Sars) employee Johan van Loggerenberg, adding to the company’s woes as private and government entities review their relationship with them.

This week, Van Loggerenberg, who resigned from Sars in 2015 after explosive reports of a “rogue unit” at Sars implicated him, said through his lawyer he was considering legal action against the firm.

“We are considering the legal implications of the matter – including taking legal action against KPMG and individuals associated with them – and will determine the most appropriate course of action in due course,” said his attorney, Brett Murison, of legal firm Boqwana Burns.

The leading auditing firm last week withdrew its report on an investigation it conducted into Sars, used as part of evidence of an alleged covert unit.

Sars commissioner Tom Moyane’s explosive media statement earlier this week castigated the firm for the move and was the first in a slew of outrage against them.

Yesterday, Business Leadership South Africa suspended KPMG from its association, with the Save South Africa campaign commending the move.

This came hot on the heels of a statement released by former finance minister Pravin Gordhan after meeting with top executives at the firm on Thursday.

In it, he called for KPMG’s full disclosure on its alleged involvement in state capture.

Further adding to the firm’s woes, the Democratic Alliance, which runs 30 municipalities, said it would be reviewing all audits done by KPMG.

“Now that National Treasury has announced that government departments and entities will review all KPMG contracts, it is imperative that they take the lead and empower the structures below to do so.”

It said KPMG was dealt another blow by Finance Minister Malusi Gigaba, who said government would implement stricter regulations on who audits its entities.