Steinhoff saga shrouded in silence

Should a company be unable to pay its debts, the debt could be converted to equity and the lender would become a controlling shareholder. But every case was different, Saville said.

Bondholder registers are not widely available. Generally, though, Steinhoff’s offshore bonds are trading at significant discounts and its South African bonds are trading at a discount of about 20% — an indication that the liquidity problems are far more severe in the European operations than in the South African ones, according to a portfolio manager.

Abedian said the most inexplicable aspect of the matter was the total silence of the regulators.

In Germany, the tax authority said its fiscal code’s tax secrecy provisions prevented it from providing any information about potential investigations of companies or individuals. The Oldenburg attorney general, which is investigating Steinhoff for alleged accounting fraud, could not be reached for comment this week.

In South Africa, the Financial Services Board announced in early December it would investigate whether Steinhoff had made false and misleading reports in terms of section 81 of the Financial Markets Act. This week, it said it could not comment because sharing information on active investigations was prohibited by law.

The JSE is investigating whether Steinhoff breached its listing requirements. The share continues to trade on the exchange because it is still trading on the Frankfurt exchange, where it has its primary listing, and suspending trading would put local shareholders at a disadvantage, the JSE said.

But the company must produce audited financial statements by January 31 to continue trading in Germany.

The Companies and Intellectual Property Commission has also launched an investigation into possible contravention of the Companies Act and regulations, but this week the department of trade and industry was unable to provide an update on its progress.

The Independent Regulatory Board for Auditors said it would launch an investigation into Steinhoff’s auditors, Deloitte. The board only recently referred Deloitte for a disciplinary hearing about the work it did for African Bank, which was placed under curatorship in August 2014.