Ann Crotty Writer-at-large
Picture: ISTOCK
Picture: ISTOCK

Steinhoff scored a brief public relations victory on Thursday, when it said it was shelving plans to seek shareholder approval for controversial one-off payments to members of its supervisory board at its annual general meeting.

But the excitement abated when shareholders realised Steinhoff was not scrapping the plans, but would be putting them to shareholders later. There also appears to have been opposition to the proposed reappointment of Steve Booysen, Heather Sonn, Johan van Zyl and Angela Kruger-Steinhoff to the supervisory board, and to the reappointment of Deloitte.

Analysts said the move on remuneration seemed to be based on the belief that shareholder indignation would abate in the coming months.

David Maynier, DA shadow minister of finance, described the move as nothing more than a tactical retreat. "The fact is the remuneration proposals are grotesque and should have been withdrawn completely."

He said the proposal to increase the remuneration of certain independent directors, "who seem to have been asleep at the wheel during what may turn out to be the biggest corporate scandal in the history of this country", was a spectacular failure of judgment.

The South African Companies Act requires that all fees paid to nonexecutive directors must be submitted for approval by at least 75% of shareholders, before any payment can be made. Dutch company law also requires that shareholders must resolve whether payments may be made to members of the supervisory board, which is the equivalent of SA’s nonexecutive directors.

Steinhoff said on Thursday that the members of the supervisory board, Van Zyl, Sonn and Booysens, who were due to receive the payments for additional work, have asked that the matter be decided by the newly constituted supervisory board and its remuneration committee. Whatever decision is made will have to be approved by shareholders before any payments can be made.

Steinhoff said the three directors had contributed substantial amounts of time in supporting Steinhoff and the management board. They had met regulators, shareholders and financial creditors and, in some cases, had effectively been working full time to respond to developments.

On the composition of the supervisory board, Steinhoff said it was crucial for the company and its shareholders that there was continuity in these roles "until such time as the stability of the group is reasonably assured".

In addition to reappointing the four existing members, shareholders will be asked to approve five new members. Steinhoff said it was essential for the recovery of the company and its restructuring that the four be reappointed.

One analyst said the difficulty was determining whether the four existing supervisory board members would be useful in helping to identify where the skeletons were or would focus on ensuring that no blame fell on them.

Steinhoff has also urged shareholders to support the reappointment of Deloitte.

"Steinhoff is not opposed to the rotation of auditors, but believes the continuation of Deloitte as auditor until the end of the current financial year in September 2018 is essential," the company said.