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Compliance and unethical business practices down the chain

Tom Fox | November 8, 2017

The fallout from the KPMG and McKinsey scandals in South Africa are taking some interesting twists. Initially, it appeared that those businesses might well face regulatory scrutiny for their collective service efforts in the country. For KPMG, its miss-steps involved auditing the Gupta family and its business interests. For McKinsey, it was working, with or without a contract for a Gupta family controlled partner in South Africa as part of a transaction with a South African state-owned enterprise.

Both companies now face potentially much greater backlash from their customers. First Barclay’s bank announced it was winding down its business with McKinsey. Then the worldwide reinsurer Munich Re decided it would drop its relationship with KPMG’s troubled South African office. This type of review, while not unprecedented is certainly something that bears scrutiny for every compliance practitioner as it demonstrates not only the potential reputational harm for engaging in...

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