Steinhoff. Picture: SUPPLIED
Steinhoff. Picture: SUPPLIED

Steinhoff International Holdings is paying for forensic auditors at PwC to help SA’s  anticorruption police investigate alleged financial wrongdoing that brought the retailer to the brink of collapse.

While PwC completed its report of more than 3,000 pages on its probe on behalf of Steinhoff last year, legal authorities have shown little sign of progress in identifying those responsible for transactions that caused Steinhoff to report accounting regularities in late 2017. The Frankfurt-listed stock remains more than 98% lower than before the announcement, and the company faces years of legal battles brought by those who lost out.

Steinhoff “agreed to contribute funds to cover a substantial portion of the costs of the PwC work, due to the size and complexity of the investigation required,” it said in a statement on Tuesday. “The funding is to be provided on an arms-length basis, with the retailer having no involvement in the investigation.”

Steinhoff and an elite law-enforcement division have repeatedly squared off in parliament over why the authorities have made so little progress in holding individuals to account.

Former CEO Markus Jooste quit when the accounting discrepancies came to light, and PwC’s report linked him to deals that may have led to the financial collapse. He denies wrongdoing.

Steinhoff remains in operation after a series of asset sales and a deal with creditors to skip payments on about €9bn of debt through 2021. However, the company said on Tuesday that its Conforama business in France faced an uncertain future after Covid-19 lockdowns as it had been unable to secure a state-guaranteed loan for which it was eligible. Steinhoff said it was “exploring all possible options” for the unit. Trading for the group as a whole was “significantly better” than expected at the early stages of the pandemic, as stores benefited from pent-up demand, Steinhoff said.

All subsidiaries, other than Conforama, had sufficient liquidity, the retailer said. The Hawks the Steinhoff collapse  have said they were able to make serious headway with their investigations only after being given full access to the PwC report, which was completed in March 2019.

A year ago, the police said the probes had been fast-tracked and more people were being assigned to the job. PwC uncovered €6.5bn in irregular transactions between Steinhoff and eight firms between 2009 and 2017.

The deals, orchestrated over several years, enabled the owner of chains from the US to France to artificially boost profits and asset values, the probe  found. Since releasing a 10-page summary last year, Steinhoff has limited access to the full document. It paid PwC at least €35m for the investigation and technical accounting support, according to its annual reports.

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