Bank weighs Steinhoff’s bid take money out of SA
Steinhoff International has applied to the South African Reserve Bank for permission to take money out of the country to help with its liquidity challenges abroad.
Reserve Bank deputy governor Kuben Naidoo said that while the Bank did not want money to be taken out of the country, it was also cognisant of the fact that the liquidation of the group would have severe implications on its local operations, including jobs as well as savers.
He did not say how much Steinhoff wanted to take out of the country. “We have to manage that balance,” Naidoo said. He could also not say when a decision would be taken.
He was addressing three parliamentary committees — the standing committee on finance, the standing committee on public accounts and the portfolio committee on public service and administration — on the Steinhoff scandal, which has seen investors and pension funds lose billions of rand.
Presentations were also made at the hearing by the JSE, the Treasury, Financial Services Board (FSB), the Independent Regulatory Board for Auditors (Irba), the Government Employees Pension Fund (GEPF) and the Public Investment Corporation.
Naidoo said the bank was investigating whether any exchange-control laws or regulations had been breached by Steinhoff. He did not believe there had been contraventions but said a definitive answer would emerge only once the forensic audit was complete.
The Steinhoff management, board and shareholders also appeared at the hearing.
Updating the committees, Steinhoff management said former CEO and major shareholder Markus Jooste had been reported to the Hawks for suspected offences under the Prevention and Combating of Corrupt Practices Act.
Hawks spokesman Brig Hangwani Mulaudzi confirmed receipt of the report, but said the details were confidential.
The MPs on Wednesday were frustrated by the failure of Steinhoff representatives to answer questions directly. They said they were constrained by ongoing investigations.
The MPs were also dissatisfied with the lack of rigorous action by the regulators.
It emerged from the hearing that the FSB was investigating two cases of insider trading in Steinhoff, which allegedly took place in August and November/December. It was also investigating one case of false and misleading reporting related to accounting irregularities, which are under investigation by Pricewaterhouse Coopers.
The insider-trading reports were submitted to the FSB by the JSE. The head of the FSB’s directorate of market abuse, Solly Keetse, said the insidertrading cases did not concern former chairman Christo Wiese, who was cleared.
The Companies and Intellectual Property Commission has served the Steinhoff board with a compliance notice requiring the directors to identify the individuals involved in the falsification of accounting records and to institute criminal action against them within six months.
Meanwhile, Irba was investigating the role of Steinhoff’s auditor, Deloitte.
The GEPF reported that it held 428-million shares in Steinhoff with a market value of R24bn at the end of November, a week before the startling revelations of alleged accounting irregularities led to the collapse of the retailer’s share price.
On January 23, the GEPF held 392-million shares in the company with a market value of R3bn. Between the end of November 2017 and January 23,
the share price fell from R56.26 to R7.84.
FSB deputy executive officer for pensions Olano Makhubela said 948 of the 1,080 pension funds surveyed — excluding the GEPF and pension funds of state-owned enterprises — had exposure to Steinhoff to the value of R25bn on December 1 before the scandal broke.
This represented 1.43% of total sampled assets. By December 8 this exposure had dropped to R7bn, representing about 0.42% of total sampled assets.
Pension funds that responded to the survey and had exposure to Steinhoff suffered a R18bn loss, or 1% of total assets. Individual fund exposure ranged between 0.01% and 6.04%.