Steinhoff skullduggery

One cannot but assume dishonesty and skullduggery of a high order at board level in the Steinhoff-Star debacle. What is only now being unveiled to shareholders in Star (an independently-listed subsidiary of Steinhoff with its own shareholders and balance sheet) — having acquired the shares in good faith on the available published information — is “Sorry guys, we forgot to mention that Star is party to a guarantee of third-party debt related to a historic Pepkor Holdings management investment scheme, which is underpinned by the Steinhoff share price”.

Can anyone believe the brazenness of this revelation? Why not a squeak about this at Star’s recent investor presentation, which purportedly showed its full indebtedness to parent company Steinhoff International (posted on the Steinhoff website)?

In the organogram on page 20, total Star indebtedness to Steinhoff is shown at €0.2bn. Furthermore, in March Star issued a Sens notice that the group had paid off all the outstanding loan notes. Yet now we are told in last week’s trading update about a R90m “cash incentive scheme and the guarantee of third-party debt related to the management investment scheme”. The hit to halfyear earnings will be of the order of 50%! This is on a par with the Gupta leaks. What sort of garbage is this? Those “astute” and astonishingly wealthy owners of companies who originally sold them into Steinhoff International in exchange for Steinhoff paper (now worthless) cry out that they were hoodwinked. So they want the whole thing unwound … as if those of us who invested in Steinhoff International shares, believing that the audited financials fairly represented the going state of the company, could similarly turn around and cry “We had no idea … give us back our money”!

It is the shareholders in Star who are now being told to bail out the management of the company without so much as a hint of what lay in store for them. The mind boggles.

Sooner or later, of course, the entire mess, including this latest revelation, will be subjected to scrutiny in our supreme court. All this while management sleeps peacefully in the knowledge that their promised “cash incentive scheme” is fully intact. It is sick! David Southey Via e-mail