GUEST COLUMN
MOYAGABO MAAKE: Old-style research and scepticism would have saved asset managers from Steinhoff
The structure was obfuscated, financial items made no sense, the acquisition spree was too frenzied
In the Steinhoff fallout, asset managers who placed investors’ money in the disgraced company — along with analysts whose research they acted on — have advanced all manner of excuses for failing to spot accounting fraud at the retailer. With respect, these excuses, such as the explanation that Steinhoff’s financial statements did not hint at fraud, assume that anyone listening possesses the intelligence of a rotten banana. Investment research firms and brokerages are paid millions each year to examine companies in depth and to advise customers — including institutions such as Coronation, Sanlam and the ordinary shop on the street — whether these companies are worth buying or not. Doing so on the basis of financial statements and interviews alone would be sloppy. As Wall Street legend Sallie Krawcheck, who led three wealth managers during her career, put it in an interview with business magazine Fortune as far back as 2002: "I always took the attitude that I was being misled. If I we...
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