Law has lost its long arm against white privilege

AS A young man growing up in the black township of Soshanguve, north of Pretoria, life was interestingly difficult, but it was home.

The most notable words you would hear from our elders was that “the law has long arms” and that we must guard our behaviour because if not, sooner or later the law would catch up with us.

Unbeknown to me, I grew to experience that the law tends to be blind, blind to people of a certain class, colour and creed who are almost beyond reproach. They have wealth, they control the narrative through certain media establishments, they control politicians and are almost in charge of public discourse, it doesn’t matter what they do, the law appears to have lost its long arms against these people since the advent of our democracy.

Steinhoff International Holdings Limited (“SIHL”) is a South African company which until December 7, 2015 was the holding company for more than 40 retail brands in over 30 countries, including a mattress firm in the US, Poundland in England as well as Poco in Germany.

It has been listed on the Johannesburg Stock Exchange since 1999 as SIHL but since December 7, 2015, it has its primary listing on the Frankfurt Stock Exchange as Steinhoff International Holdings N.V. (“SIHNV”), which became the Dutch holding company for the Steinhoff retail empire. Despite the legal company change, Steinhoff has maintained its headquarters and tax residence in Stellenbosch. Most of Steinhoff’s current and former directors are also residents of South Africa.

From as far back as June 26, 2013, Steinhoff and its management, with the help of Deloitte South Africa, has been misinforming its investors about the true value of its assets, certain illegal off balance sheet transactions and the overall financial transparency of its business transactions, thereby depriving investors of the ability to properly value the affected Steinhoff securities and inflating their values.

In June 2014, Steinhoff informed the public that it was planning to restructure itself to access European capital markets, but kept its improper accounting practices a secret and even denied various suspicions of accounting irregularities between December 2015 and December 2017 (including rumours about criminal investigations and improper accounting.

On December 5, 2017, Steinhoff finally started to disclose its accounting problems and until February 28, 2018 has disclosed various details about improper asset valuations, insider dealings and off-balance sheet transactions, which have led to the delay in the publication of its 2017 financial results and the acknowledgement that it will have to restate at least its 2015 and 2016 financial statements, likely also 2014.

With the December 5, 2017 surprise disclosure which shocked the markets, long-standing chief executive Markus Jooste announced that he was leaving the company with immediate effect. But even at this point, authorities like Johannesburg Stock Exchange (JSE), Financial Services Board (FSB) and government institutions saw no evil and heard none.

The fact that this atrocious deed by the company was dubbed “an accounting irregularity” instead of clear corruption and criminal behaviour was evidence of how a certain group of people are above the law. Steinhoff and its executives have so far evaded the law despite having committed repugnant financial crime in this country and abroad. When I led a team of lawyers and trade union colleagues into the den of the so called “Stellenbosch mafia” to demand financial records of the now shamed Steinhoff, the narrative in the media was downplayed as financial irregularities committed by an unknown hand, but in truth, this was a deliberate fraud. The law seems to have missed the criminality behind this man’s alleged absurd genius.

This is the man who allegedly tipped off his inner circle that the share price will crumble like rolling mass action during workers’ salary strikes. He knew what he did and the implications but like a sea without shore he simply resigned and observed the collapse of livelihoods of millions of workers from the comfort of his Hermanus mansion.

Why are the unions, government and civil society all of a sudden mum about the loses that workers suffered at the hands of these sick men? Why did the PIC commission just brush off this company during its investigation conveniently co-chaired by Steinhoff beneficiary Gill Marcus? As I write I am reminded again that, only if our government was less corruptible maybe, just maybe, one day, we may realise a glimpse of justice.

Maepa is a board member of Stichting Steinhoff International Compensation Claims (Foundation) established under Article 3:305a of the Dutch Civil Code (“DCC”)