A draft application for the appointment of forensic chartered accountants to help law enforcement agencies get to the bottom of the Steinhoff scandal will be finalised soon, Hawks boss Lt-Gen Godfrey Lebeya says.

The Hawks are investigating various matters relating to Steinhoff involving fraud, misrepresentation and the loss of billions of rand for investors.

Separate investigations by PwC have uncovered the over-statement of income and assets at the company, which was once Europe’s second-largest furniture retailer.

Civil society groups and various experts have previously suggested that the Hawks and other law enforcement agencies do not have the capacity to investigate such complex cases.

In a written update to parliament’s finance, public accounts, and public service and administration committees, Lebeya said a draft application for the appointment of forensic chartered accountants had been compiled and is being considered by the prosecution team.

Lebeya said additional investigators were also added to the team. Furthermore, an additional 15 confidential statements were obtained from the Companies and Intellectual Property Commission (CIPC) with regards to companies or subsidiaries affiliated to Steinhoff Holdings, Lebeya said in his update.  

At the centre of the saga is former Steinhoff CEO Markus Jooste, one of the senior executives who was at the helm of the retailer ahead of its collapse in December 2017.

Late in 2018, Jooste told parliamentarians that he was not aware of any financial irregularities on the day he resigned. He instead blamed the crisis on a protracted dispute with Austrian business partner Andreas Seifert, which triggered investigations into Steinhoff by European regulators and tax authorities.

Steinhoff largely settled the impasse with Seifert by selling half its German furniture chain Poco to Seifert, who had sued the retailer in three countries.

In March, CEO Louis du Preez reluctantly released the names of other former executives allegedly responsible for about €6.5bn (R107bn) of fictitious deals at the retailer. This was after the parliamentary committees adopted a resolution to issue a subpoena to force the company to reveal the names. Du Preez and chair Heather Sonn argued at the time that doing so would imperil future prosecutions and violate European privacy laws.

In addition to Jooste, the other executives implicated include former head of finance in Europe Dirk Schreiber; former CFO Ben la Grange; and former company secretary Stéhan Grobler. Four individuals in counter-party companies were also named, including Siegmar Schmidt, a former Steinhoff Europe CFO.

Steinhoff has also been subpoenaed by the Financial Sector Conduct Authority (FSCA) to hand over a full copy of the PwC forensic report into the fraud at the retailer. The summary of the report did not name those implicated, simply saying “a small group” of former executives, with the help of outsiders, structured and implemented transactions that inflated profits and asset values.

Lebeya said the investigation team, together with prosecutors, will have full access to the PWC report from May 13 to 24.

With Linda Ensor


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