Finance

Sygnia Cuts Ties with Consulting Giant Deloitte Over Reputational Issues

The biggest consultancy firms in the world are now going through a lot of turmoil for having been mixed up in unsavory episodes over the past few years, and that is no different when it comes to their operations in South Africa. One of the biggest scandals to have hit South Africa in recent years was the one related to the Gupta family, and in addition to names like KPMG and McKinsey, Deloitte and Bain and Company have also been found to have been involved. Needless to say, the reputation of the consultancy firms in question is currently in tatters, and some of them have also lost business contracts due to their involvement.

The latest consulting behemoth to lose business is Deloitte, which lost its contract with South African asset management firm. In this regard, it is perhaps far more damaging for Deloitte that Sygnia explicitly stated that they decided to snap ties with the consultancy firm due to its current reputation. It is a major client and is involved in a range of businesses starting from Fintech, asset management, and brokerage services. It is listed in the Johannesburg Stock Exchange and has the potential of becoming one of South Africa’s most prized companies at some point in the future. In a statement released by Sygnia, the company stated,

Deloitte subsequently resigned as Sygnia’s auditors on 11 June 2019, ahead of Sygnia’s [meeting]. The process of reviewing and appointing alternative external auditors is well advanced, and the appointment of Sygnia’s new auditors will be communicated in due course.

Whenever such a client decides to cut ties, then it is almost always followed by a knock on effect that eventually sees the loss of more clients. It remains to be seen whether such a thing commences or not. In fact, the other big consultancy firms plying their trade in South Africa should also be wary of a knock on effect, since the end of the day, many other existing clients might be having second thoughts about associating with them. It will perhaps take a few years for the Big 4 consulting firms to repair their reputation in South Africa.

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Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.
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