Heather Sonn's report was 'wishy-washy', Yunus Carrim says
MPs were very dissatisfied about the presentation made to four parliamentary committees on Wednesday by the chair of the Steinhoff supervisory board Heather Sonn.
Finance committee chair Yunus Carrim said it was "wishy washy".
Sonn briefed members of the finance, public accounts, trade and industry, and public service and administration committees on progress made in stabilising the global furniture retailer. But MPs said her presentation was a PR exercise that did not get to the root of what went wrong at Steinhoff and what the details of the accounting irregularities were that led to the collapse of its share price in December.
MPs were frustrated at the lack of detailed information about the progress made in the forensic investigation by PwC into the accounting irregularities. Public accounts chair Themba Godi wanted to know what went wrong within Steinhoff and what it was about the company which made the accounting irregularities possible.
Carrim said no details had been provided. "You are not helping," he told Sonn, saying that her presentation was disappointing and bordered on being demoralising.
Sonn insisted that she did not take the report back to Parliament lightly but that in answering questions, she had to consider all matters affecting the group and had to take care not to jeopardise criminal investigations under way. She said she was not attempting to withhold information.
Substantial debts have been repaid
Sonn had told MPs that Steinhoff International aimed to provide audited financial statements for the global furniture retail group for the 2017 financial year before the end of December and for the current year by January 2019.
"The threats of imminent collapse have effectively been averted; interim arrangements have been made with creditors, and there have been structured disposals of certain assets," she told a joint meeting of four parliamentary committees that are scheduled to hear updates by a number of regulators on their investigations into Steinhoff, including the JSE, the Independent Regulatory Board for Auditors, the Financial Sector Conduct Authority, and the Companies and Intellectual Property Commission.
The PwC investigation into the accounting irregularities that prompted the collapse of the Steinhoff share price was ongoing and good progress had been made, Sonn said. PwC expects the investigation to be substantially completed by the end of 2018. She insisted that those responsible would be held accountable.
Sonn said substantial debts had been repaid, for example, the African debt, and Steinhoff had met various regulators and dealt with their requests. A report under the Prevention and Combating of Corrupt Activities Act had been submitted and various interactions with law enforcement officials are ongoing, she said.
"The group intends to reclaim bonuses paid in the past to certain senior executives under the relevant Dutch code," Sonn said, adding that virtually all the group’s 120,000 jobs had been secured.
She said Steinhoff had successfully repaid €2bn of South African holding company debt and very little African debt remained. Good support had been received from international debt holders.
"A lockup agreement with creditors, including a standstill, was finalised in mid-July 2018 and this is providing time for the group to implement a debt restructure supported by a very high percentage of debt holders/lenders. A debt restructure will afford the group financial stability until the end of 2021."
As part of the restructuring framework all debt will be restated at par within current borrowing entities with a common maturity date for all loans three years from the restructuring date. There will be no cash payment of interest on any debt excluding for Hemisphere, the sub-group that owns European property.
Appropriate asset security will be provided at the current borrowing entity level where feasible and permissible. All debt instruments will retain existing guarantee claims.
The proceeds from disposals will be retained to fund ongoing liquidity requirements with the agreement of lenders.