Steinhoff name executives who cooked company’s books
Former Steinhoff Chief Executive Markus Jooste and seven others were involved in a €6.5 billion (about R107 billion) accounting fraud at the South African retailer, the new CEO told lawmakers yesterday.
Steinhoff said on Friday an independent report had found it overstated profits over several years in the fraud that involved a small group of top executives and outsiders and took what was once an investor favourite to the brink of collapse.
PwC conducted the independent investigation.
The company did not name the individuals last week, citing legal reasons.
But during yesterday’s session in parliament, lawmakers instructed Louis du Preez, who was appointed CEO last year, to reveal those involved.
“We have no choice but to instruct you as a committee to give us the names of the people who PwC alleges committed the most serious offences,” said Yunus Carrim, chairman of the finance parliamentary committee.
Du Preez then named former CEO Jooste and former chief financial officer Ben la Grange, alongside six other people, who he said the investigation report has identified as key players in inflating Steinhoff profits and asset values over several years.
Jooste, who resigned hours before Steinhoff disclosed the hole in its accounts in December 2017, could not be reached for comment through his lawyer.
He has previously denied any wrongdoing.
La Grange could not immediately be reached for comment through his lawyer.
Du Preez also identified four other outsiders, who he said worked alongside Jooste, La Grange and two other executives, over several years to enter into fictitious transactions with entities purported to be third parties to create the illusion of income to hide losses.
The accounting fraud forced the company to write down the value of its assets by €11 billion.
Steinhoff will pursue claims against those involved and co-operate with legal authorities on any civil or criminal investigation, Du Preez said.
Earlier this month, the newly-appointed director for investigations and enforcement at the Financial Sector Conduct Authority (FSCA), Brandon Topham, said: “The next two months will be interesting” in terms of the regulator’s investigations into Steinhoff.
Topham indicated that announcements would be made regarding charges against the company or individuals associated with it.
Specifically, these related to one count of insider trading and one of publishing false and misleading financial statements. Other charges could well follow.
“Steinhoff [itself] published a Stock Exchange News Service stating that its financial statements were wrong,” Topham pointed out. “So they have consented to the fact that they have published false and misleading information. Even though nobody at this stage has been charged, there is definitely a case to be made.” –
Steinhoff published a Stock Exchange News Service stating that its financial statements were wrong. Brandon Topham Director for investigations and enforcement, FSCA.