KPMG, a less than perfect odyssey comes to an end

KPMG Aruba just expired on December 31st 2018, and when we woke up slightly hung over on January 1st, 2019, the brand had morphed into KDC interim.

Insiders are hopeful the whole kit and kaboodle will be absorbed by EY, but the later will probably cherry-pick and only recruit top talent, the rest of the bean counters will have to fend for themselves.

There are also ongoing discussions with another firm, BDO from Curacao, to salvage the remains; the KPMG Meijburg tax people, that left earlier, now operate as DC tax; one of their more fortunate senior partners jumped ship to EY.

Why am I telling you all that? Because there is story there.     

In Aruba, the Audit and Advisory practice did not have a local face for many years. It was originally established under the local leadership of Tico Croes, the accountant, and Erwin Croes, but when they moved on the company plugged away, with Dutch-born leadership at the helm.

They did some work here for the government, they were involved with the new DIMAS software, the one that misplaces all documents, they serviced some local clients, nothing as exciting as Curacao

This week, Ronald van Raak published an interesting piece in, I stuck it into Google Translate and edited a bit.

Van Raak is Kingdom Relations spokesperson for the Lower House fraction of the Socialist Party in the Netherlands.

The title of his article was: Stop Hiring KPMG.

This is what he said:

It went very fast and there was little publicity given, but since January 1st the name KPMG in the Caribbean disappeared. This is big news, because KPMG was involved in almost all government activities on Curaçao and Sint Maarten.

In recent years, there have been many cases of fraud on the islands and all too often KPMG was involved. I have often asked for clarification about these abuses, also at KPMG Netherlands, but it fell on deaf ears. Then silently, KPMG took a drastic measure: The international brand decided to close its Caribbean branch.

The extent of fraud and corruption was apparent, for example, when former prime minister Gerrit Schotte of Curaçao was sentenced to three years in jail, because he took bribes from Mafia boss Francesco Corallo, who actually ran things on the island. Corallo’s books were done by KPMG. That same Mafia boss is now in Italy, in trouble again for bribing leading politicians. They funneled the cash via Fortis Bank, where KPMG Nederland’s audited the books. KPMG was also involved in illegal gambling on Curaçao, where billions in drug money, were probably laundered.

In the Netherlands, such abuses are often dismissed as ‘Antillean folly.’ But van Raak thinks KPMG’s culture lacked structure, and consequently the firm was banned by the South African government, in addition to getting involved in large-scale fraud and corruption, around the Gupta family, an Indian business empire with dirty ties to President Zuma.

In the United Kingdom, the central bank audited KPMG critically, after it became clear that they were involved in wide-ranging corruption.

KPMG is a multinational and one of the four major international accountants (besides EY, PwC and Deloitte). The head office of KPMG is in the Netherlands where they had also been involved in a long series of corruption scandals that seem embedded in the company’s DNA.  

The article goes on to lament the fact that KPMG keeps earning millions as a government consultant in the Netherlands despite the tarnished reputation and the long history of fiascos linked to it.

Why are we so dependent on a corrupt company, he asks?! And vows to obtain the information regarding how many jobs KPMG had been entrusted with over the past ten years, from all ministries, and how much did that cost and what were the results.

Then perhaps it will become clear how much damage these KPMG consultants cause.

The Netherlands must now also stop hiring KPMG, he concludes.

Share on:

January 05, 2019
Rona Coster