January 17, 2018 / 8:47 AM / 2 years ago

South African regulator pursuing criminal complaints against SAP, KPMG, McKinsey

JOHANNESBURG (Reuters) - South Africa’s companies registry office is pursuing criminal complaints against SAP (SAPG.DE), KPMG and McKinsey on suspicion that business they conducted with friends of President Jacob Zuma broke the companies act, it said on Wednesday.

The offices of auditors KMPG are seen in Cape Town, South Africa, September 19, 2017. Picture taken September 19, 2017. REUTERS/Mike Hutchings

The Companies and Intellectual Property Commission (CIPC)submitted the complaints to South African police in November and December last year and the matter is ongoing, the CIPC said in an emailed response to questions.

German software maker SAP, auditor KPMG and management consultants McKinsey have all been accused of unduly influencing government contracts in collusion with companies controlled by the Gupta family, who have been accused of using political connections to win work with the state.

The Guptas deny wrongdoing and say they are victims of a politically-motivated witchhunt.

SAP said it has been cooperating with South African authorities investigating the deals for several months, including the police priority crime unit.

KPMG declined to comment. McKinsey did not immediately respond to a request for comment.

A police spokesman was not immediately available to comment.

The CIPC has in the past helped bring about changes at South African firms by pursuing complaints under the companies act.

Separately, South Africa’s state prosecutor said it would on Wednesday serve a court order on McKinsey relating to a 1.6 billion rand ($130 million) contract with state utility Eskom that the global consultancy worked on with Trillian, a local firm that was then controlled by Gupta family associates.

Trillian will also be served with a court order, a spokesman for the National Prosecuting Authority said. Trillian declined to comment.

McKinsey has offered to pay back the 1 billion rand ($81 million) it earned for its share of the work done at Eskom in 2016, but denies doing anything illegal.

KPMG cleared out its South African leadership in September last year after an internal investigation found work done for Gupta family firms “fell considerably short of KPMG’s standards”. KPMG denied it had done anything illegal.

SAP (SAPG.DE), Europe’s biggest technology company, said last year it had “let down South Africa” by paying $7.7 million in commissions to Gupta-related companies between December 2014 and November 2016.

Zuma, who has faced and denied numerous corruption allegations since taking office in 2009, said last week he will set up a commission of inquiry into allegations of influence-peddling in the government.

Deputy President Cyril Ramaphosa, who was elected leader of the ruling African National Congress last month, has vowed to fight rampant corruption and revitalize the economy.

Reporting by Ed Stoddard, Nqobile Dludla in Johannesburg and Eric Auchard in Frankfurt; Writing by Joe Brock; editing by Jason Neely and Adrian Croft

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