Steinhoff scandal puts kids at risk
As the HIV epidemic devastated impoverished townships in the early 2000s, a big corporate philanthropist made it possible for charity Abraham Kriel to help hundreds of orphans.
Now, Steinhoff International is struggling to survive what could be the worst accounting scandal in SA history – and the charity is bracing for the day the support vanishes.
With creditors circling and angry shareholders suing Steinhoff for billions, it’s not hard to see how the most defenceless victims risk being cast aside.
“The unfortunate reality is that in difficult times resulting from reported corporate malfeasance, there’s less to give away,” said Amanda Bloch of GastrowBloch Philanthropies. “When one funder dominates the funding base and the nonprofit doesn’t diversify, they stand the chance of damage and loss and human devastation.”
In Steinhoff’s case, two children’s charities are most vulnerable: Abraham Kriel in Soweto, which feeds and clothes children (many of whom are Aids orphans), and the Knysna Initiative for Learning and Teaching (Kilt), which runs programmes to improve education quality for 12 000 pupils. Their budgets rely heavily Steinhoff money.
A Steinhoff spokesperson says it stands by both commitments. How sustainable that is depends on whether creditors who agreed to a debt revamp in July pressure Steinhoff to cut spending. Much also rides on how damning the findings of an anticipated PricewaterhouseCoopers auditing investigation are.
In Soweto there’s a lot at stake for HIV orphans. Steinhoff foots the bill for as many as 400 daily meals, some delivered directly to the children’s homes where they share it with relatives who can’t afford basic necessities. “For each of the beneficiaries, another three or four people are supported,” Abraham Kriel’s Miemie Retsuri said. “The impact is huge.”
Kilt’s programmes at 15 schools are also in jeopardy. The charity got 86% of its budget from Steinhoff in the fiscal year ended February, or R10.9 million.
Said Gill Marcus of Kilt and ex-South African Reserve Bank governor: “Given the cataclysmic events, credit should be given to Steinhoff’s interim board that they remain committed.”
In its latest annual report, Kilt’s auditors cited “material uncertainty” on whether Steinhoff can honour the five-year, R75 million commitment it made in May 2017. It’s already reportedly reduced this year’s funding. – Bloomberg