Reference no: EM132665106

Another allegation is based on the firm's involvement in the Gupta's interest in acquiring the Optimum Coal Mine (OCM) from Glencore. KPMG claims that it provided "limited transaction support services" but admits that "during the course of the engagement KPMG South Africa became aware of information which called into question the integrity of the Guptas" which was "not adequately dealt with by a number of senior leaders in the firm and was not taken into account when assessing whether to continue to perform work for the Gupta group. Another charge levelled against KPMG relates to a problematic report produced by the firm for South African Revenue Service (SARS). The report claimed that a rogue spy unit was operating within SARS, which led to the removal of finance minister Pravin Gordhan, on the grounds that he should have known about (or was involved with) the rogue unit. Since the findings were deemed incorrect, SARS is pushing for KPMG to be blacklisted from all government business. KPMG responded: "We recognise and regret the impact [the SARS report] has had. KPMG South Africa had no political motivation or intent to mislead." Nhlamu Dlomu, the new CEO of KPMG South Africa, commented: "This has been a painful period and the firm has fallen short of the standards we set for ourselves, and that the public rightly expects from us. I want to apologise to the public, our people and clients for the failings that have been identified by the investigation." "It is important to emphasise that these events do not represent KPMG, our people or the values we have adhered to over decades of committed client service. My pledge and promise to the country is that we can and will regain the public's confidence."

Outline and explain the dilemma KPMG was faced with before parting ways with the Guptas?