Business News of Wed, 29 Aug 20186
uniBank Collapse: KPMG failed; sue them – Adongo
Bolgatanga Central MP, Isaac Adongo, has accused audit, tax and advisory services company, KPMG, of conducting a sub-standard audit that led to the takeover of local bank uniBank by the Bank of Ghana (BoG).
The BoG recently fused uniBank together with Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank, to form a totally new local bank called Consolidated Bank Ghana (CGG) Limited.
In 20 March 2018, government announced the takeover of uniBank due largely to liquidity challenges.
Announcing the takeover, the Governor of the BoG, Dr Ernest Addison, said uniBank is currently insolvent.
KPMG was then named as Official Administrator to manage the bank for some months.
Speaking in an interview with Moro Awudu on Class 91.3FM on Wednesday, 29 August 2018 on the back of a public forum organised by Progressive Alliance Media Communications (PAMC) on the banking crisis, Mr Adongo faulted KPMG for the collapse of the bank, saying it played a crucial role in uniBank’s takeover.
“When you take on an assignment that can ultimately lead to litigation as a firm of chartered accountants, one of the first things you do is to conduct a risk assessment of that job and a risk assessment by KPMG would have shown that if I [KPMG] am finally going to give you figures and numbers that I cannot validate or engage in processes that allow me to confirm those numbers and express an independent opinion on them, then, I am exposed to a possible litigation in which I will now be asked questions, whether I engaged in proper professional conduct in engaging in all the activities that will make me capable of standing by those figures”.
The lawmaker, therefore, questioned why a firm of reputable character like KPMG, will “accept to engage in an activity when you know your risk is not fully covered”.
For him, it is “unacceptable” for KPMG to allow the BoG to use its report to take over uniBank.
“We are told in the report that they [BoG] have refused to publish that KPMG in its foreword has indicated that they cannot stand by that report in any place. They have indicated that the mandate that they were given was such that they could not engage in the performance and procedures that will allow them to validate numbers, audit the numbers and standby those numbers. As a result, they have told the BoG that: ‘Don’t use that report in taking any decision, otherwise you are on your own’. [But] BoG goes ahead to use that report to take over somebody’s bank,” he explained.
For him, KPMG needs to “stop the stomach economic auditing”, and wondered why the firm allowed itself to be complicit in the collapse of the bank which could have been revived.
“You are here, working for a client, the client dies and you then supervise its burial by becoming the receiver of the client. Clearly, where are we heading with professional ethics and standards? KPMG, you have failed us!”
The legislator further advised lawyers of uniBank to formally inquire if the report in question was authored by KPMG and “take them [KPMG] to court” to prove under what standards they conducted that job”.