Steinhoff sharks ‘must go to jail’

BLSA SPEAKS: BACKS PROSECUTION OF THOSE LIABLE

On SA growth, BLSA CEO says business wants to play a role in securing new investment. Moneyweb

Business Leadership South Africa (BLSA) says it will ensure those found liable for Steinhoff International’s demise are prosecuted. “We need to isolate [and] expose the few that have acted in a manner that is less than wholesome and in some instances even fraudulent …. We will be the strongest proponents that somebody needs to go to jail for this, otherwise what we stand for will amount to nothing,” CEO Bonang Mohale said on Thursday.

“In the case of Steinhoff in particular … with the facts before us there is no doubt that the intent was corruption and if you intend on defrauding people you will find ways to hide it in a manner that ordinary boards will find difficult to unearth.”

Mohale said that in line with the King IV Code of Corporate Governance, the amended Companies Act holds individual directors personally liable. The Steinhoff debacle could be a “test case”.

“In the case of Steinhoff for instance, this is probably the biggest blight in terms of magnitude, but also because of the people involved, because all of us have been conned.”

Mohale said that on the surface, Steinhoff was one of SA’s greatest investors and probably had one of the most competent boards, which included individuals who knew how to run big, complex entities, but who had been blindsided.

As part of a set of “ambitious proposals” to inform the current socioeconomic engagement agenda, BLSA said it’s committed to working with law enforcement agencies on bringing state capture and corruption cases to court speedily, to protecting anti-corruption whistle-blowers, working with the SA Revenue Service to restore tax morality and expediting VAT refunds and assisting to ensure social grants reach their intended beneficiaries. In an effort to boost the economy, President Cyril Ramaphosa announced on Monday that government aims to raise at least R1.2 trillion ($100 billion) in new investments over the next five years.

Mohale said BLSA understands that Ramaphosa is looking for $100 billion of foreign direct investment and $100 billion from local investors.

“If we achieve these figures I think it can double the GDP growth that we’ve experienced up until now.”

Business wants to play a role in securing new investment, demonstrate that it’s not on an investment strike and BLSA would ask its members to put their money where their mouths are, Mohale said. He added that its members could help the president by ensuring they’re more understanding when dealing with state-owned enterprises (SOEs).

Since government is the lender of last resort, SOEs are unlikely to default and therefore unlikely to be unable to meet their covenants. As such, BLSA would ask some of the banks to restructure loans to SOEs in the long term.

BLSA would also ask its members to consider to avail resources to serve on the boards and management of SOEs and will work with government to optimise its SOE portfolio to cut waste and improve efficiency, profitability and cash flow.