DURBAN - THIS week’s startling decision by German prosecutors to charge Steinhoff International executives responsible for the near collapse of the multinational retailer has raised hopes that the wheels of justice are finally turning.
The German authorities announced on Thursday that three former Steinhoff executives and an outsider would be charged for balance sheet manipulation of more than €2.3 billion (R42.10 billion) between July 2011 and January 2015.
The authorities have refused to identify the individuals, but former Steinhoff chief executive Markus Jooste’s name has been bandied about as one of those who could face the charges.
Alarm bells were first raised in 2015 when the German authorities raided the offices of one of Steinhoff’s subsidiaries prior to the retailer’s listing on the Frankfurt Stock Exchange.
The share price took a knock and declined more than 69 percent between April 2016 and the end of 2017 to R56.
At the moment, Steinhoff shares are exchanging hands at around R1.85.
James-Brent Styan, the author of Steinhoff: inside SA's biggest corporate crash, said the wheels of justice may have been slow but were finally turning to bring those responsible to book.
“In South Africa it seems as if we don’t have the capacity to charge those individuals who are responsible for Steinhoff’s problems. While the individuals have not been named, it is encouraging that the German authorities are making progress on the case,” Styan said.
Steinhoff’s spectacular decline came when former auditors Deloitte refused to sign the financial statements in November 2017, leading to a more than 95 percent decline in its shares when the group admitted to accounting irregularities in December 2017 and Jooste resigned immediately.
The group appointed PricewaterhouseCoopers (PwC) to investigate and fictitious or irregular transactions to the value of €6.5bn were uncovered, which happened between 2009 and 2017 financial years.
It appointed a separate supervisory board to deal with the aftermaths of the accounting scandal.
The Financial Sector Conduct Authority (FSCA) hit Jooste with a R161.57 million for insider trading in October last year, but the Hawks and the National Prosecuting Authority (NPA) have yet to lay criminal charges on the individuals.
Styan said the fine was a slap on the wrist for Jooste .
“It is absolutely ridiculous to impose such a small fine to someone who was at the helm when the scandal took place.
“It seems as if the Hawks and the NPA don’t have enough capacity or expertise to bring those guilty individuals to book. It is even more disturbing to read that Steinhoff is willing to give the NPA R30m to complete their investigations into the company,” Styan said.
sandile.mchunu@inl.co.za
BUSINESS REPORT