MICHAEL MARCHANT: Steinhoff: in the dark, still
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Nearly three years after Steinhoff’s finances were exposed as a sham and the company lost nearly all its value overnight, it is offering shareholders and former partners a settlement agreement.
Facing legal claims for over R130bn, Steinhoff’s management is proposing a R16bn settlement, payable in a mixture of cash and Pepkor shares.
Yet crucial reports which contain detailed information about how the fraud took place and who is responsible are still not publicly available.
How can shareholders make an informed decision if they’re being kept in the dark?
The fact is, Steinhoff shareholders are the victims of one of SA’s largest corporate frauds. For at least a decade, it is alleged, key executives and managers led by former CEO Markus Jooste engaged in self-dealing transactions to enrich themselves at the expense of the company. They covered their tracks by lying about the company’s profits.
At the core of the scandal were the absentee auditors under whose watch this took place. Steinhoff’s long-standing auditor, Deloitte, failed to report a gaping hole in the company’s balance sheet until it finally raised the alarm in 2017.
From large institutional investors like the Public Investment Corp, which lost the R21bn it invested on behalf of the Government Employees Pension Fund, to smaller individuals saving for retirement, shareholders have endured catastrophic losses.
It is thus no surprise that shareholders, along with some of Steinhoff’s creditors and former business partners, have brought over 90 lawsuits against the firm in SA, Germany and the Netherlands.
Steinhoff’s answer to the R130bn in legal claims is this settlement agreement. Without it, the company says, liquidation is inevitable.
At least one shareholder has indicated his support for the deal: plutocrat Christo Wiese, Steinhoff’s former chair. Under the deal, he’ll get nearly R8bn in cash and Pepkor shares. Ironically, Wiese had sold Pepkor to Steinhoff in 2014.
But there’s a catch. Steinhoff is pressing shareholders to agree to the settlement when they do not have all the information.
After a decade of being defrauded, shareholders have the right to know exactly what happened that led to the firm’s collapse and who is responsible. Yet they, and the public, have been denied this right.
The first major report that is being kept secret is the PwC forensic report delivered to Steinhoff’s board in March 2019. According to an 11-page "overview" released by Steinhoff, it reveals misrepresentation and fraud by executives and management. ...
Facing legal claims for over R130bn, Steinhoff’s management is proposing a R16bn settlement, payable in a mixture of cash and Pepkor shares.
Yet crucial reports which contain detailed information about how the fraud took place and who is responsible are still not publicly available.
How can shareholders make an informed decision if they’re being kept in the dark?
The fact is, Steinhoff shareholders are the victims of one of SA’s largest corporate frauds. For at least a decade, it is alleged, key executives and managers led by former CEO Markus Jooste engaged in self-dealing transactions to enrich themselves at the expense of the company. They covered their tracks by lying about the company’s profits.
At the core of the scandal were the absentee auditors under whose watch this took place. Steinhoff’s long-standing auditor, Deloitte, failed to report a gaping hole in the company’s balance sheet until it finally raised the alarm in 2017.
From large institutional investors like the Public Investment Corp, which lost the R21bn it invested on behalf of the Government Employees Pension Fund, to smaller individuals saving for retirement, shareholders have endured catastrophic losses.
It is thus no surprise that shareholders, along with some of Steinhoff’s creditors and former business partners, have brought over 90 lawsuits against the firm in SA, Germany and the Netherlands.
Steinhoff’s answer to the R130bn in legal claims is this settlement agreement. Without it, the company says, liquidation is inevitable.
At least one shareholder has indicated his support for the deal: plutocrat Christo Wiese, Steinhoff’s former chair. Under the deal, he’ll get nearly R8bn in cash and Pepkor shares. Ironically, Wiese had sold Pepkor to Steinhoff in 2014.
But there’s a catch. Steinhoff is pressing shareholders to agree to the settlement when they do not have all the information.
After a decade of being defrauded, shareholders have the right to know exactly what happened that led to the firm’s collapse and who is responsible. Yet they, and the public, have been denied this right.
The first major report that is being kept secret is the PwC forensic report delivered to Steinhoff’s board in March 2019. According to an 11-page "overview" released by Steinhoff, it reveals misrepresentation and fraud by executives and management. ...
