How will the business community handle this?

For too many years now, the South African government has shown no respect for its citizens by allowing corruption to flourish at all levels in its ranks. It would appear that the only people that can’t seem to see this is … er … the government.

An increasing number of voices have called for corrupt government officials to be held accountable for their activities but, with the cancer having spread even to law enforcement agencies, those officials have continued to avoid being held to account and have persisted in their nefarious deeds.

But, with the recent revelations that three formerly highly regarded companies, KPMG, McKinsey and SAP, have aided and abetted government’s corrupt activities, the question needs to be asked: how will the business community handle this?

Without wanting to minimise or make light of government corruption which should be dealt with in an appropriate manner, let’s for a moment place the spotlight firmly on what these companies have done.

The results of their conscious collusion with Gupta companies and corrupt government officials amounts to nothing less than economic sabotage and should be dealt with accordingly by their peers.

Offering to pay back the money now that they have been caught out is the same as an armed robber offering to return the cash he stole when he is caught so that he can be set free.

John Veihmeyer, global chairperson of KPMG International, says, “KPMG SA made serious mistakes and errors of judgment in these engagements. I sincerely apologise for what went wrong in KPMG SA. This is not who we are.”

Why, oh why, doesn’t somebody teach the so-called top executives how to really handle such a crisis? There’s only one way to do it. Face the facts and call things as they are. It’s a pity Veihmeyer resorted to the kind of PR/corporate speak that everybody can see through instead of coming clean and calling the facts as they are. The things that happened were not “mistakes” or “errors of judgement”. They were deliberate actions undertaken over a period of time during which any of the parties involved could have come clean, even if they had initially allowed themselves to become involved in the corruption. But they didn’t. These are mature adults with education and experience, not immature youngsters still learning about life. Calling what they did “mistakes” and “errors of judgement” is an insult to everyone else’s intelligence.   

So how has the business community responded?

Under the leadership of Bonang Mohale, Business leadership South Africa has set the pace. Bonang has rightly acknowledged that there are a number of KPMG employees who are good solid citizens who were not part of the dirty tricks, but BLSA has also rightly suspended KPMG’s membership pending the outcome of an independent investigation.  

SAICA has somewhat belatedly announced that it is launching an enquiry into the KPMG employees who are SAICA members. If it is found that they are indeed guilty of breaking the code that SAICA members are expected to comply with, they should have their SAICA memberships terminated.

If South African banks were prepared to close the accounts of Gupta companies, will they be closing the accounts of the three companies that have been exposed? If not, what’s the difference? Why can these three companies be allowed to continue operating with bank accounts when others have had their accounts terminated?

What about the clients of these discredited companies? Sasfin Bank, Sygnia and Hulisani have terminated their relationships with KPMG. Will their other clients adopt a “boys will be boys” approach and continue as if nothing happened?

The time has come for those with the power, means and influence to exert pressure where it counts and set an example that sends a very clear message to any other company flirting with crossing the line in the interests of making a quick buck.

Others will be watching closely to see what happens. If they see that these three companies get away with what they allegedly did, there may be some of their employees who will be greatly encouraged to try their luck. After all, if the risk is not too great, why not take a shot at it? The sanctions should be so severe that this never happens again.

Of course, another question that needs to be answered is: how many other companies have done similar things but have just not been found out yet? If you know something that will expose such a company, speak up. Don’t be a silent accessory to economic sabotage.

Alan Hosking is the publisher of HR Future magazine, @HRFuturemag, and assists executives to prevent, reverse and delay ageing, and achieve self-mastery.

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