KPMG South Africa to hire external CEO after corruption scandal

By Nqobile Dludla

JOHANNESBURG (Reuters) - KPMG South Africa said on Wednesday it was looking for a new chief executive from outside the company to restore the auditor's reputation after a corruption scandal that saw it lose several major clients.

Current Chief Executive Nhlamulo Dlomu, was promoted from within the company after a clear out of management last year due to work done for a company owned by the Gupta family - friends of former president Jacob Zuma who were accused of influencing the award of government contracts..

During Dlomu's tenure KPMG South Africa has cut hundreds of jobs and shut regional offices to cope with the loss of business after South Africa's auditor general, in April, said it would terminate all government contracts with the firm.

The Guptas and Zuma have denied any wrongdoing and KPMG has said it found no evidence it had acted illegally.

"Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimise prospects of rebuilding trust," KPMG said in a statement.

Dlomu will remain at the company, taking on a newly created global role focusing on ethical leadership and organisational culture change.

The new CEO will be recruited externally, KPMG said, adding that in the interim, its South Africa Chairman Wiseman Nkuhlu will serve as an executive chair.

More than a dozen private companies, including Barclays Africa <BGAJ.J>, one of KPMG's biggest clients, have dropped the auditor after a public backlash in South Africa over the role of the auditor in the high-profile Gupta saga.

(Reporting by Nqobile Dludla; Editing by Joe Brock and Elaine Hardcastle)