The chairman of KPMG in the Netherlands has resigned, less than a month after the authorities there announced a criminal investigation into allegations of a multi-million dollar tax fraud related to the construction of the firm’s new Dutch headquarters
Jurgen van Breukelen had held the position for under two years and said in a statement that he was stepping down because KPMG had to ‘make major changes’ to enable the company to break from ‘the recent past of misjudgments and errors’. The interests of the firm and its clients ‘have been damaged and need to be restored,’ he said.
Last month, Dutch authorities said they had launched a criminal investigation into the joint venture between KPMG and a project developer to build the firm’s new headquarters in Amstelveen. The investigation is said to centre on allegations of tax evasion, forgery and false invoicing between 2009 and 2010, and has so far included the search of several KPMG sites as well as two private residences. The prosecutors are looking at the role of two unidentified executives. They suspect that KPMG and a developer had set up a scheme for new headquarters so as to boost costs of tax filings with the aim of reducing taxable income. In a statement, prosecutors said: ‘The project developer is also suspected of fake billing. This may have led to millions of euros in avoided taxes.’
According to Reuters, a KPMG spokesman in the Netherlands said van Breukelen was not among those people being investigated, but that one was a former KPMG partner.
In a statement, van Breukelen said: ‘As long as the attention inside and outside our company is focused on me, KPMG will not be able to focus fully on its clients and the turnaround we are making as an organisation. This turnaround requires a clear signal that our company is breaking from the recent past. It is then up to me as the person ultimately responsible to reinforce that signal.’
This move followed news in December last year that KPMG had reached a €7m (£5.7m) settlement with the Dutch Public Prosecutor’s Office in relation to the financial statements of a former audit client and its subsidiaries. The authorities said three former audit partners and KPMG conducted audits in a way that allowed payments to remain concealed.
KPMG said that its supervisory board in the Netherlands would nominate a new chairman ‘in the near future’ in collaboration with the firm’s global umbrella group. The Dutch prosecutor said that it had confiscated assets relating to the building project.