Ques­tions over loan to Stein­hoff act­ing CEO

Sunday Times - - Business News -

● Stein­hoff In­ter­na­tional says act­ing CEO Danie van der Merwe has re­paid a R26.4mil­lion loan backed by com­pany shares he had taken out a week be­fore the stock price col­lapsed due to an ac­count­ing scan­dal.

The tim­ing of the loan raises ques­tions about how much Van der Merwe knew of the fi­nan­cial mal­prac­tice that has brought the re­tailer to the brink of col­lapse.

“The tim­ing of the loan ap­pli­ca­tion is highly sus­pi­cious,” the Fed­er­a­tion of Unions of South Africa (Fe­dusa) said in a state­ment. “There is ab­so­lutely no way that Stein­hoff top ex­ec­u­tives, in­clud­ing Van der Merwe, could not have full knowl­edge of what was go­ing on on the eve of the share col­lapse.”

Van der Merwe’s per­sonal in­vest­ment com­pany, Ruby Street In­vest­ments, bor­rowed the funds from In­vestec on Novem­ber 29, the same day that com­pa­nies owned by for­mer CEO Markus Jooste and his son-in­law, Ste­fan Pot­gi­eter, took out a R93-mil­lion loan from the same bank, ac­cord­ing to a court fil­ing by In­vestec in De­cem­ber. Both loans were backed by Stein­hoff stock and were ar­ranged by Pot­gi­eter.

Stein­hoff re­ported ac­count­ing ir­reg­u­lar­i­ties on De­cem­ber 5, caus­ing the shares to crash more than 80% in three days. Jooste quit im­me­di­ately, and has since been re­ferred by the com­pany to an anti-cor­rup­tion po­lice unit. He hasn’t com­mented pub­licly since. Van der Merwe was Stein­hoff’s chief op­er­at­ing of­fi­cer at the time and was made act­ing CEO on De­cem­ber 19.

Van der Merwe was sued along­side Jooste and Pot­gi­eter by In­vestec days af­ter the Stein­hoff share col­lapse. The bank said when the loans were agreed all three must have been aware of ac­count­ing con­cerns.

The clerk of the High Court in Cape Town said she wasn’t aware of any for­mal re­sponses filed in the law­suit.

A Stein­hoff spokes­woman said Van der Merwe had a pri­vate-loan ar­range­ment with his per­sonal bank at the end of Novem­ber and has since set­tled the debt. It’s stan­dard prac­tice for lenders to ac­cept per­sonal as­sets as se­cu­rity for loans and the trans­ac­tions have no im­pli­ca­tions for the com­pany, she said. Van der Merwe didn’t re­spond to a re­quest for com­ment.

In­vestec has set­tled the mat­ter with the rel­e­vant par­ties, the bank said in e-mailed com­ments, de­clin­ing to com­ment fur­ther. Nei­ther the lender nor Stein­hoff gave de­tails on how or when Van der Merwe re­paid the loan.

The tim­ing of the loan ap­pli­ca­tion is highly sus­pi­cious

Fe­dusa state­ment On R26.4-m loan to act­ing CEO Danie van der Merwe

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