KPMG’s entire top team in S Africa axed over Gupta, Pottinger links

Audit firm KPMG has cleared out its top team in South Africa after it became embroiled in a fraud scandal that has already destroyed public relations firm Bell Pottinger.

Five senior partners as well as chief executive Trevor Hoole and chairman Ahmed Jaffer were ousted on Thursday as the British accounting giant published damning findings from an internal investigation.

It is reported that Barclays is now reviewing its ties to KPMG, which audits the accounts of a number of firms that have a strong presence in South Africa.

The fallout from the scandal that brought down PR firm Bell Pottinger is spreading after the resignations of the chief executive, chairman and a string of top executives from the South African arm of KPMG, which audits companies owned by the controversial Gupta family.

The resignations follow the publication of an investigation into the auditor's work on businesses owned by the Guptas - who hired PR firm Bell Pottinger to mount a secret campaign focused on ''economic apartheid'' and ''white monopoly capital'' - as well as for its work for the South African Revenue Service.

The Guptas have been accused of benefiting financially from their close links to South African President Jacob Zuma, whose son Duduzane has been a director at several Gupta-owned companies.

KPMG South Africa audited Gupta-owned firms for 15 years until March 2016, when it resigned the contract.

Earlier this week The Mail revealed how investment house Old Mutual was also considering its contract with the accounting giant.

KPMG audited the accounts of billionaire businessmen brothers Atul, Ajay and Rajesh Gupta. The trio were close to South African president Jacob Zuma and have been accused by a public watchdog of improperly influencing government contracts.

Firms associated with the Guptas are coming under increasing pressure from activists in South Africa.

KPMG said on Thursday night that its internal probe into its work for the Guptas found work that fell ''considerably short of KPMG's standards'' – but was not illegal.

The auditor accused staff at Gupta-owned businesses of misleading accountants.

KPMG said, ''We regret that our association with the Guptas and their business entities went on for far too long.''

They accepted that four KPMG partners should not have attended a lavish Gupta family wedding in 2013, even if no rules were broken. One later described the wedding as ''the event of the millennium'' in a leaked email.

KPMG's move to ust its top South African team comes in the same week that financial public relations firm Bell Pottinger's British arm collapsed into administration as clients fled after it was accused of running a racially divisive PR campaign for the Guptas.

KPMG is still under investigation by South Africa's IRBA, the auditors' regulatory body, which can strike firms off its register.

And major companies such as Old Mutual, British American Tobacco and BHP Billiton are also coming under increasing pressure to withdraw their business from KPMG.

The accountant's new chief executive in South Africa, Nhlamu Dlomu, said, "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.''

KPMG was also auditor of Rolls-Royce, HBOS, Co-op Bank and football's world governing body FIFA when they were all mired in controversy.

KPMG said it would donate the £2.2 million in fees it earned in fees from Gupta-controlled firms to charity.