Steinhoff. Picture: SUPPLIED
Steinhoff. Picture: SUPPLIED

Investigations into irregularities that led to Steinhoff’s share price collapse are continuing, regulators will tell MPs on Wednesday.

The regulators — the Financial Sector Conduct Authority (FSCA), the Independent Regulatory Board for Auditors (Irba), the JSE, the Companies and Intellectual Property Commission and the Hawks — will present updates on their investigations at a joint meeting of four parliamentary committees: finance, public accounts, trade and industry, and public service and administration.

The FSCA is investigating two cases of insider trading, one case of false financial statements and one case of insider trading and false statements related to the Viceroy report. The head of the FSCA’s market abuse department, Solly Keetse, and divisional executive for market infrastructure Jurgen Boyd said all these investigations were being finalised or were ongoing.

The one investigation of insider trading involves the sale of Steinhoff shares during August 2017 by a foreign company, and relates to whether unpublished price-sensitive inside information had crystallised before the selling transactions had taken place. Keetse said they had liaised with foreign regulators to assist in collecting evidence from witnesses and legal entities.

The other case of possible insider trading was focused on numerous trading accounts that sold Steinhoff shares during the period between September 2017 and December 5, the date on which the news of accounting irregularities was revealed and former Steinhoff CEO Markus Jooste resigned. That investigation related to possible trading using inside information by Steinhoff, its executives, Steinhoff related parties and others.

The investigation into false financial statements by Steinhoff can only be finalised when the 2017 financial statements have been published, the 2015 and 2016 financial statements have been restated and the PwC forensic report has been released, the FSCA officials said.

The third investigation into insider trading and false statements concerns the Viceroy report into Steinhoff. Research company Viceroy had short positions in Steinhoff at the time of publishing its report.

Irba director of standards Imran Vanker provided an update of its investigation into Steinhoff auditor Deloitte. He said the finalisation of any possible charges would require the restated audited financial statements, which still have to be issued by Steinhoff, which is in turn awaiting the outcome of the PwC forensic investigation.

"The scope and timeframe for the completion of the audit investigation therefore cannot be determined until there is progress by multiple entities in providing clarity on the internal processes of reporting and accounting," Vanker said.

The investigation into the auditing firm spanned a number of jurisdictions. He highlighted resource constraints and said Irba had already applied to the Treasury for additional funding to increase its investigation capacity.