Questions over loan to Steinhoff acting CEO
● 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