Steinhoff suspends ex-bosses
In the first action against serving employees since it became the subject of one of the biggest corporate scandals in SA’s history, Steinhoff International Holdings on Tuesday suspended its former CFO and another former executive.
The news coincided with speaker of the National Assembly Baleka Mbete giving her consent that former CFO Ben la Grange, together with former CEO Markus Jooste, be summoned to appear before the standing committee on finance next week.
La Grange and fellow director Stehan Grobler were initially retained on a consultancy basis in the wake of the disclosure of accounting irregularities late in 2017, which fuelled a share slump that wiped off about R230bn of the company’s value.
Steinhoff is also facing a lawsuit from aggrieved shareholders who could be seeking damages of as much as R185bn.
“As part of the group’s ongoing investigation, the group has decided to suspend these consultancy arrangements,” a spokesperson for Steinhoff International said, confirming a report by Bloomberg.
Steinhoff shares dropped 0.9% on the JSE on Tuesday, leaving it with a market capitalisation of just R9.4bn.
Parliamentary spokesperson Moloto Mothapo confirmed to Business Day that the two former executives will be served “immediately” and will be expected to appear before the committee on August 29, as scheduled.
“We have sought legal opinions on the matter and we think we are in our rights to issue the summons, and we are hopeful they will co-operate,” Mothapo said.
The standing committee on finance, chaired by Yunus Carrim, has led the parliamentary inquiry into the collapse of Steinhoff – the second-largest furniture retailer in the world – which resulted in the company writing down the value of billions of euros of its assets.
While the inquiry was not convened to establish criminal liability or any civil liability of Steinhoff or its employees, Jooste has previously declined to appear before it on the grounds that his rights may be impugned ahead of any criminal investigation into his conduct.
While not having admitted to any wrongdoing, Jooste did pen a letter to employees on the day of his departure, admitting he had made “some big mistakes”.
Earlier on Tuesday, the JSE slapped Steinhoff Investments, which issued the group’s preference shares, with a R1m fine, its largest so far in 2018, and a public censure for not informing those shareholders in early December 2017 that Moody’s Investor Service had downgraded its rating.
Moody’s announced the downgrade on December 7, the day after the supervisory board of Steinhoff Holdings announced it was investigating possible accounting irregularities within the Steinhoff group.
In March, the JSE suspended the company when it failed to release its financial 2017 results within the required six months after year-end.
A spokesperson for Steinhoff investor relations told Business Day the group is committed to complying with all regulatory requirements.