The DA has written to the Independent Regulatory Board for Auditors (IRBA) to request an urgent investigation into allegations that KPMG failed to raise the alarm over alleged fraudulent transactions at VBS Mutual Bank.
It is being reported that KPMG failed to report irregularities pertaining to R900 million in deposits at VBS which could not be traced. The SARB has also uncovered a number of potential “fraudulent transaction” not raised by either KPMG or PwC.
The DA has been concerned about business practices at VBS for some time – and these allegations of fraudulent activity could have serious consequences for the more than 20 municipalities which have investments with the bank.
We therefore urge the IRBA to institute a probe into KPMG and PwC urgently to get to the bottom of these accusations.
When an auditing firm fails to conduct its business diligently and independently it does not only tarnish the profession, but it puts the entire financial sector at risk and in this case, it could jeopardise the financial security of municipalities.
Urgent action is needed as the possible collapse of VBS could potentially threaten the day-to-day operations of the municipalities and ultimately disrupt service delivery to the people.