Shareholders retain Deloitte, the devil they know
At the Steinhoff annual general meeting (AGM) on April 20, 72.8% of the shareholders voted in favour of reappointing auditing firm Deloitte as the company’s statutory auditor, despite its failure to pick up or report the alleged accounting irregularities and fraud for which Steinhoff is being investigated by German authorities.
The Steinhoff financials for
2017 are expected to be released only towards the end of this year. Additionally, Steinhoff has said its 2015 and 2016 accounts cannot be relied on and are now being restated.
Called to answer questions in Parliament in January, former Steinhoff chairperson Christo Wiese said Deloitte raised concerns about the company financials last year, although they were the same auditors the company had used over the past 10 years, “admitting that they had missed things”.
In a document circulated before the AGM, Steinhoff’s supervisory and management boards said they believed it to be in the best interests of the company that Deloitte be reappointed as the statutory auditor for the financial year ending on September 30 2018.
“One of the company’s priorities is the expeditious finalisation of audited consolidated financial statements for the 2017 financial year, and the revised statements for the 2015 and 2016 financial years.
“Deloitte is already involved in these matters, and the appointment of a new auditor midway through a financial year will lead to unacceptable delays in the completion of these statements. This in turn would affect the company’s dealings with all stakeholders, who require the certainty of audited financial statements,” the document read.
The supervisory board said it also believed Deloitte was best placed to apply the lessons of the 2017 audit and forensic processes in completing the 2018 audit.
Deloitte has been charged by the Independent Regulatory Board of Auditors for its role as auditor of African Bank before it was placed under curatorship. Deloitte also audited Leisurenet, which went into liquidation in 2000, after which two company executives were convicted of fraud.