Financial services firm Investec PLC reappointed KPMG to serve as its joint auditor Aug. 8, but almost a fifth of the bank's shareholders objected to the decision, the Financial Times reported Aug. 9.
The Johannesburg- and London-listed asset management and banking group released a statement with the results of its annual shareholder meeting, explaining why it decided to continue with KPMG.
KPMG has been embroiled in scandals over its ties with the controversial Gupta family, who are accused of using their links to former South African President Jacob Zuma to amass wealth, and its role in the collapse of VBS Mutual Bank, which was placed under curatorship in March due to liquidity challenges. A number of other South African financial institutions have dropped KPMG.
Investec said its decision was influenced by "the need to ensure stability within the South African financial system and the audit profession at a time of uncertainty and volatility in the country as a whole." It added that it was concerned about the failures of KPMG's internal controls and procedures, but added that "of greater concern is the significant negative impact this has had on the country's audit profession, individual lives and the South African economy."
The bank has had EY audit its accounts for 17 years, with KPMG acting as joint auditor for the past 13 years. It paid E&Y and KPMG £8.9 million and £4.6 million, respectively, in 2018 in audit fees.