PwC assembles 60-strong team for Steinhoff probe, involving 14 work streams
Accounting firm PwC has assembled a team of more than 60 people globally to probe the allegations of accounting irregularities involving retailer Steinhoff, which has more 700 individual entities operating in 30 different jurisdictions.
Technical accounting, legal and IT specialists have been drawn into the investigation, which also involves seven full-time partners, the head of PwC’s forensics arm in Africa Louis van Strydom reported in Parliament on Wednesday.
Van Strydom appeared at a follow-up hearing on Steinhoff involving four parliamentary committees — finance, public accounts, public service, and administration and trade and industry.
Members of the Steinhoff executive management did not attend the hearing. Their legal representative Rob Driman of Werksmans told MPs that all senior managers had to attend a managers meeting in the UK this week to deliberate on future strategy and restructuring, and to meet local and global vendors.
Driman said the management board members acting in an interim capacity also felt they had limited rights to represent Steinhoff shareholders and had no clear mandate to do so until the group’s AGM on April 20. They would hopefully be able to appear at a further parliamentary hearing on Steinhoff scheduled for June.
Driman also reiterated the concern of the Steinhoff management board members not to divulge price-sensitive information at the hearing, nor to interfere with the criminal investigations underway.
Strydom told MPs that 14 work streams were involved in the investigation into the allegations of accounting irregularities. They were working in parallel with each other to expedite the probe and would each submit their individual reports when their work was completed, rather than waiting for one final report of all work-stream findings to be compiled.
High-level reviews had been conducted to determine which of Steinhoff’s operational units were not affected by the allegations. Four, special high-level reviews had been completed into 39 entities, PwC was currently involved in a further 18 reviews involving 150 entities and has another six planned. This work would assist the auditors in finalising their statutory audits.
Strydom said 3.3-million documents had been accumulated and 333,000 hard documents from senior executives’ offices had been scanned and were being worked through. He said the PwC team was trying to complete its investigation as soon as possible.
No limitations had been placed by Steinhoff management on the scope of the investigation. Monthly reports are provided by each work stream to the supervisory board; weekly feedback is given to the group’s audit committee; two meetings a week are held with executive management on operational issues; and regular contact is maintained with the external auditor Deloitte.
Steinhoff has indicated that the 2015, 2016 and 2017 financial statements will have to be restated.