Feb 1, 2018
Crisis-hit Steinhoff reports former CEO to police
Feb 1, 2018
Steinhoff has reported its former chief executive Markus Jooste to South Africa's elite Hawks police unit over suspected corruption, the company's acting chairwoman told a parliamentary committee hearing on Wednesday.
South Africa's Steinhoff, which owns more than 40 brands including Poundland in Britain, revealed accounting irregularities in December, sparking an 85 percent share price fall that wiped more than $10 billion off its market value.
It has since been scrambling to sell assets and find short-term funds to avoid parts of its business pulling down the sprawling retail empire which became one of the world's largest household goods retailers.
"Based on our investigations to date, we have reported the former CEO Markus Jooste to the Hawks ... The matter is now in the hands of the Hawks for investigation and prosecution," Steinhoff's acting chairwoman Heather Sonn told the committee, citing the Prevention and Combating of Corrupt Practices Act.
Jooste, who oversaw the company's rapid expansion over almost two decades, resigned on Dec. 5 as the accounting scandal broke. The former CEO has not made a public statement since and could not immediately be reached for comment on Wednesday.
"We don't know at this stage if the crisis could have been prevented," Sonn told the joint finance, public accounts and public service administration committee that was called to get preliminary information on Steinhoff.
She said the company was committed to fix what went wrong and that it was co-operating fully with all regulators.
The Hawks - full name the Directorate of Priority Crime Investigation - is responsible for investigating national criminal priorities such as serious organised and commercial crimes and serious corruption.
Steinhoff shares rose around 2 percent as the hearing was taking place.
Steinhoff officials said that retention of jobs, including 50,000 in South Africa, was one of the company's key aims.
Steinhoff's former chairman and leading shareholder Christo Wiese, who also spoke at the hearing, said the scandal "came like a bolt from the blue". Wiese said he became aware of problems at Steinhoff three working days before the company's accounts had to finalised for a board meeting in December. He said Steinhoff was in "absolute turmoil" at the time "when this bomb exploded".
Wiese said he "understood people's anger" after the firm admitted to accounting irregularities.
South Africa's Financial Services Board (FSB) said it was investigating two cases of possible insider trading and one of false or misleading statements relating to Steinhoff.
The Johannesburg Stock Exchange said it was still far from uncovering what had happened at the retailer.
South Africa's Government Employees Pension Fund (GEPF) said its shareholding in Steinhoff depreciated to 1.8 billion rand ($152 million) on Dec. 31 from 24.1 billion rand on Nov. 30, in the wake the accounting scandal at the retail group.
South Africa's central bank said it was investigating whether Steinhoff had breached any exchange control laws or regulations. Were Steinhoff to collapse, it would not result in financial instability, the bank added.
"While the collapse of Steinhoff may result in significant losses for banks, lenders and investors, SARB is of the view that this will not result in financial instability," the bank said in its presentation.
"SARB is investigating whether any exchange control laws or regulators have been breached."
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