Image: Redisa

On September 15, the High Court of South Africa presented its judgement concerning the liquidation of the Recycling & Economic Development Initiative of South Africa (REDISA). And on October 1, the external auditor of Redisa NPC (“REDISA”), KPMG, has revealed some insights concerning the liquidation of the entity and reflected on its accounting work risks associated with its work to Carte Blanche journalist, Tony Beamish, in an email interview.

Currently, the company claims it is not concealing any facts concerning REDISA from the forensic auditors, said Nqubeko Sibiya, KPMG Communications Specialist.

In the email interview with the KPMG representative, Beamish addressed the issue of the breach of Schedule One of the Companies Act — forensic auditors, Accountants @ Law, have lately claimed that REDISA has made this breach, as it was paying dividends to NYI and Avranet while KPMG wasn’t aware of it. Sibiya opposed it by saying that no dividends were paid by REDISA and “there was no breach of Schedule One of the Companies Act”.

When asked why REDISA failed to provide the remediation liability, Sibiya said that Financial Reporting Standards (“IFRS”) didn’t require its provision. Moreover, technical specialists for a legal and accounting opinion of KPMG concluded that REDISA didn’t have remediation liability.

One more controversial issue, which was brought up by Carte Blanche journalist, was connected to significant risks that the auditor reported in 2016, tax non-compliance included. Sibiya said that necessary audit procedures and relevant findings were made to address all the risks and were reported in written form to management and the audit committee.

As for other risks, the journalist asserted that KPMG failed to expose the substantial risks of REDISA covering expenses, which profited the directors of REDISA through KT and NYI. KPMG Communications Specialist replied that KPMG acted in accordance with all the reporting duties connected to the external audit of the financial statements of REDISA for the financial years ended 28 February 2012 to 29 February 2016.

Sibiya ignored the question, regarding numerous transactions that have been exposed by Accountants @ Law report, and which are seen as reportable irregularities that KPMG seemed to fail to have identified.

He also highlighted that KPMG was not performing any internal audit work or corporate governance reviews for REDISA or KT.

Article source: Carte Blanche