Capitalism - Opinion

KPMG and what is wrong with the capitalist system

KPMG.jpg

Capitalism is fast losing its status as the best economic system in the world – a message brought home by audit firm KPMG’s South African branch and by public relations firm Bell Pottinger.

To me it seems a society in which firms such as Bell Pottinger and KPMG South Africa are unfortunately tolerated and even hailed as successful trend setters, runs the risk to fall apart.  

In it’s Let’s Think piece this week The Intelligence Bulletin deals with the growing opposition to, and criticism of, the capitalist system and its blind loyalty to profit.

In the aftermath of the KPMG South Africa debacle, Gareth van Zyl of BizNews made the following telling statement: “… capitalism has probably been the world’s most effective system in terms of creating wealth, but by prioritising profit over all else, what kind of society are we creating?”

In the case of Bell Pottinger the firm’s client list included some of the most notorious and hideous individuals imaginable, but for the sake of a hefty bank balance, ethics and morality was chucked out the window when the company signed up as their “reputation manager.”

The fact, that there was universal elation when Bell Pottinger closed its doors, demonstrated that the ugly side of capitalism, which the firm represented, is still widely scorned upon, and confirmed that the society Gareth van Zyl is fearful for, still have a conscience.

Also read:  Adapt-or-die-time for capitalism, democracy?    

It seems however, that the persistent chase for record breaking profit margins inevitably clouds the good judgment of supposedly sound and respectable firms and the supposedly ‘professionals’ that they employ.

This is the only logical explanation for KPMG South Africa’s announcement to Parliament’s Standing Committee on Public Accounts (Scopa) that those senior officials who resigned after they were implicated in the fabrication of what can be described as a fake document, the so-called SARS “Rogue unit report,” received golden handshakes disguised as severance packages.

The explanation by KPMG South Africa that paying out these executives should not be viewed as condoning misconduct, just does not stick.

 If KPMG South Africa’s new chief executive officer, Nhlamu Dlomu, was correctly quoted by the media that a report by the firm’s international partner “found no clear evidence of any criminal or illegal wrongdoing,” implies that these ‘professionals’ themselves is guilty of exactly the misconduct they were hired to protect society against. The statement seems to confirm the view that KPMG has totally lost not only its moral compass, but also its credibility and integrity.

Less than easy

It is possible for KPMG South Africa to rediscover its moral compass, but restoring credibility and integrity will be that easy.

It seems that KPMG South Africa is not really perturbed by the damage caused to their public image by the manner in which they responded, after taking R23 million from the SA government and the South African taxpayer for work which by their own admission. Their response was a well below par.

For reasons only known to them, they seem almost puzzled by the public outcry and their suggestions for redress are unconvincing.

KPMG South Africa did what most firms facing the same predicament do here and across the globe – just throw some money at the problem and hope it will go away – KPMG South Africa undertook to return the R23 million and offered an additional R40 million, donated to charity.

Expressing the sentiments and disgust of many South Africans at firms simply pulling out their cheque books to buy them out of trouble, DA Scopa member Tim Brauteseth,  in response to KPMG South Africa’s offer, remarked: “This smacks of ‘let’s buy our way out of this problem.’ Echoing a feeling many share, he added: “What gives comfort is when people are being taken away in handcuffs. But this doesn’t happen in South Africa. Instead, executives receive golden handshakes and leave with their pockets bulging.”

KPMG South Africa has violated the very values they are supposed to uphold, and their clients leaving in droves are their just reward. In response to the plea to be allowed time to “rebuild trust” David Maynier, DA Shadow Minister of Finance and member of Scopa, expressed the view of many South Africans when he replied: “This is, with respect, not about the survival of KPMG. It is about the survival of South Africa and frankly the country cannot survive as long as we have audit firms that produce the kind of quality of work that you produce. And you, as a company, have to take responsibility for that.”

ANC absence

It also did not go unnoticed that only one ANC MP committee member attended the Scopa-KPMG South Africa hearing, which says much about its commitment to fight corruption and unhealthy business practices in South Africa.   

To add to KPMG’s woes, Bell Pottinger-like damage control attempts such as the one offered to the media that: “…the payouts should not be viewed as the company (KPMG South Africa) turning a blind eye to the actions of those implicated,” does not wash.

Not for a moment is it to be believed that those responsible for the discredited SARS “Rogue unit report” would have produced it if not condoned, or allowed to, by KPMG South Africa.  Their mistake was getting caught out.

Irrespective of the damage control now exercised, the hangman’s noose comes by way of the verdict of a retired auditor who wrote: ”Everything the auditing profession stands for is in question because of KPMG.”

A harsher verdict is hard to imagine. Appropriate punishment should follow.

by Garth Cilliers

Follow us on Twitter | Like us on Facebook
M1
comments powered by Disqus

Subscribe to the newsletter



Final Word

Final Word

IntelligenceBul Final Word Confusing world of sluts, gays and lesbians https://t.co/qCz4oEd22o 0 years - reply - retweet - favorite

IntelligenceBul Let's Think Will Zuma admit that he is a “shady man”? https://t.co/sKBi6kL5lf 0 years - reply - retweet - favorite

IntelligenceBul Propery & Wealth Home-grown financial solution for a truly South African dilemma https://t.co/1XFQO45fNJ 0 years - reply - retweet - favorite