Steinhoff’s acting CEO red-flagged

Steinhoff International said acting CEO Danie van der Merwe repaid a R26.4 million loan backed by company shares that he took out a week before the retailer’s stock collapsed because of an accounting scandal.

The timing of the loan raises questions about how much he knew about the financial malpractice that brought the company to the brink of collapse. Acting chairpersonn Heather Sonn told investors last month any current executive would quit if they were implicated in wrongdoing.

Steinhoff is the subject of legal claims including a R59 billion lawsuit by former biggest shareholder Christo Wiese, who was also chairperson.

Van der Merwe’s personal investment company, Ruby Street Investments, borrowed the funds from Investec on November 29, the same day that companies owned by former CEO Markus Jooste and his sonin-law Stefan Potgieter took out a R93 million loan from the same bank, according to a court filing by Investec. Both loans were backed by Steinhoff stock.

Steinhoff reported accounting irregularities on December 5 and the shares lost more than 80% in three days. Jooste quit and has since been referred to an anti-corruption police unit. Van der Merwe was Steinhoff’s chief operating officer and became acting CEO on December 19. Van der Merwe was sued alongside Jooste and Potgieter by Investec days after the Steinhoff share collapse.

The bank said that when the loans were agreed all three must have been aware of the accounting concerns that led to the plunge in the share price, according to the court filing. Investec has settled the matter with the relevant parties, it said.

A Steinhoff spokesperson said Van der Merwe had a private-loan arrangement with his personal bank and has settled the debt. Jooste’s investment company, Mayfair Holdings, has until the end of the year to repay R1.6 billion of defaulted loans, according to an agreement between Mayfair and its creditors. – Bloomberg