Nicola Mawson
As the public anxiously awaits the release of a lengthy document detailing PwC’s investigation into Steinhoff’s spectacular collapse, Business Report has submitted a Promotion of Access to Information Act (PAIA) request to secure a copy of the 7 000-page document.
On December 4 last year, the Supreme Court of Appeal ordered the release of the report to three media outlets and veteran journalist Rob Rose. The document is currently in the possession of Ibex Holdings, which received it in 2023 because of a restructure of the Steinhoff Group, resulting in Ibex owning parts of Steinhoff.
Steinhoff was South Africa’s biggest corporate scandal when it collapsed after Deloitte confirmed there were accounting irregularities in 2017. The multinational holding company was listed in Germany and South Africa, and was officially liquidated on October 13, 2023. Its holdings were in the retail sector, mostly in furniture and household goods and included a 43.8% stake in the South African Pepkor group.
The parts of the company that are now held by Ibex Holdings includes stakes in Pepkor, in addition to Mattress Firm and Pepco. While Ibex, which is based in Netherlands, is not a public company, Pepkor, Mattress Firm, and Pepco are listed in various jurisdictions.
In an interview with SAfm yesterday, Rose said that the report was the product of investigation by 100 forensic auditors who took a year to pull it together. “I think what it'll [the report] do is it’ll tell us exactly how the fraud happened,” he said.
The report, which several other media outlets are seeking through a PAIA application, covers details of investigation into the occurrence of potential accounting irregularities, or potential non-compliance with laws and regulations impacting on Steinhoff’s financial statements, according to a summary of the document released in 2019.
In its summary, PwC stated: “A small group of Steinhoff Group former executives and other non-Steinhoff executives, led by a senior management executive, structured and implemented various transactions over a number of years which had the result of substantially inflating the profit and asset values of the Steinhoff Group over an extended period.”
It also noted that “fictitious and/or irregular income was, in many cases, created at an intermediary Steinhoff Group holding company level and then allocated to underperforming Steinhoff operating entities”.
“The transactions identified as being irregular are complex, involved many entities over a number of years and were supported by documents including legal documents and other professional opinions that, in many instances, were created after the fact and backdated,” stated the summary.
The fallout from the implosion has seen former Steinhoff CEO, Markus Jooste – the alleged mastermind behind the fraud – kill himself last year. In addition, the Pretoria Specialised Commercial Crimes Court last October sentenced former chief financial officer, Andries La Grange, to 10 years behind bars, with five years suspended for five years on condition that he is not found guilty of fraud during this time.
La Grange’s sentencing followed that of Gerhardus Burger, who pled guilty to three charges of insider trading in contravention of the Financial Markets Act on September 26. Burger was given a five-year suspended sentence and had to pay back the proceeds of insider trading.
Former Steinhoff director and legal head Stephanus Grobler received bail of R150 000 ahead of his court appearance, scheduled for February 14 this year.
The Financial Services Conduct Authority’s enforcement division is seeking to file a claim against Jooste’s estate to enforce the R475 million penalty it had levied on him. In addition, the South African Reserve Bank seized more than R500m from Berdine Odendaal, Jooste's rumoured former romantic partner at the time of his death. Among the items secured was a property valued at R18m, as well as millions in bank accounts.
BUSINESS REPORT