SATURNIA TRUSTEES WORRY ABOUT KPMG RELIABILITY

Wed, 20 Sep 2017 10:17:34 +0000

By Nation Reporter

TRUSTEES of the beleaguered Saturnia Regna Pension Fund have expressed fear over the outcome of the long-delayed investigation by KPMG into the governance of the Zambia’s largest multi-employer pension which was ordered by the Minister of Finance Mr. Felix Mutati in June 2017.

The Trustees’ worries stem from reports coming from South Africa that KPMG withdrew the findings of a report on that country’s tax agency that was used as evidence in a police probe against the then Minister of Finance Pravin Gordhan and the removal of senior staff from the agency.

According to press reports the  KPMG said on Friday last week that its conclusions and recommendations in a report for the South African Revenue Service about a unit that allegedly spied on politicians should no longer be relied on

“The evidence provided to KPMG doesn’t support the interpretation that Gordhan knew, or ought to have known, that the unit was established and operating unlawfully,” a statement from KPMG stated.

But Gordhan slammed the KPMG decision and promised that he will meet them in court.

“Very good people were severely intimidated due to the KPMG report,” Gordhan said on Sunday.

“The withdrawal of the report does not even begin to make amends for that and the pain they have gone through. It is high time that business, and especially professional firms such as KPMG, learn how to apologise properly and tell the whole truth. I shall be meeting with my lawyers in two days to consider our next step.”

The Saturnia Pension Fund Trustees are doubtful that KPMG will do the right thing. They strongly feel that KPMG’s lack of engagement with the Trustees is a pointer to what will come out of their investigation.

The Finance Minister Felix Mutati ordered an audit into the governance of Saturnia Regna Pension Trust Fund following media revelations of conflict of interest and illegal and irregular activities of the pension fund manager and administrator.

Members of the public had expected that the minister would order a forensic audit to get to the bottom of such serious allegations but he instead ordered a mere review of the governance of the Fund.

The terms of reference of the review have never been made public and KPMG only read them out to the Trustees without even having the courtesy to respect the Trustees who are the actual owners of the money managed by the contracted fund managers and administrators.

Saturnia Regna Pension Fund is managed by Benefits Consulting Services Limited and administered by African Life Financial Services. Both companies are owned by are owned by Munakupya Hantuba, Hakainde Hichilema and Valentine Chitalu through their holding company Menel Management Services.

Their other partner are Botswana Insurance Fund Managers who are also affiliated to Anglo American Corporation through Sanlam BIFM Global Equity Fund.

Among the discrepancies which were reported by the Pension and Insurance Authority Inspection Report of April 2016 were the unauthorised externalisation of K399 million, disappearance of title deeds  for 51 properties belonging to the Pension Fund and misapplication of pension funds to settle the liabilities of a private limited company bearing the same name as the pension fund.

Meanwhile, KPMG South Africa has fired the entire management team. The firm acknowledged allegations on its work on behalf of the Gupta family and work performed in the 2014-2015 on the Report on Allegations of Irregularities and Misconduct which KPMG South Africa produced for the South African Revenue Service (SARS).

“As a result, KPMG International has conducted a comprehensive investigation. While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards,” the statement said

“Based on the results of this investigation, significant actions have been taken and are being announced today with respect to KPMG South Africa. These actions include a series of leadership changes, changes in the governance of KPMG South Africa, and enhanced quality control procedures in certain areas.”

However, the KPMG announcement has not quenched the fire and many organisations are calling for the de-registration of the firm in South Africa. The scandal is dominating headlines in all the major newspapers.

“Axe the Rogue Auditors” says the New Age, “KPMG to face Parliament Grilling” says The Star, “Scopes are on KPMG”, The Times and “Sars’ Taxing Times” The Citizen.