EDITORIAL: Steinhoff’s board an unlikely hero for accountability
The unprecedented court action by Steinhoff’s board in going to court to reclaim R870m from former CEO Markus Jooste may yet be a watershed in enforcing corporate accountability
The unprecedented court action by Steinhoff’s board in going to court to reclaim R870m from former CEO Markus Jooste may yet be a watershed in enforcing corporate accountability. As you’ll read on page 9, the retailer’s board, chaired by former investment banker Heather Sonn, has gone further than anyone expected by seeking to claw back not just bonuses, but also all salaries and share options dating back to 2009.
And as an indication of Steinhoff’s resolve, it has even gone after its former CFO, Ben la Grange, for R272m, even though he is far less implicated in the fraud than Jooste. It is a historic step. Four years ago, two executives at Distribution & Warehousing Network repaid their bonuses, after they were asked to do so by the company. But Steinhoff, the victim of the most audacious fraud in SA history, has gone further.
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In its court papers, the company makes out a simple case that it was implicit in the employment contract that any payments to executives were based on their "sound and successful management" of Steinhoff. And as forensic auditors have since uncovered "fictitious and/or irregular transactions" to the tune of R106bn, it’s safe to say nothing much was either "sound" or "successful".
Investors — particularly money managers like Coronation, Allan Gray, Old Mutual and Sanlam, which manage SA’s pensions — should take note, and push other companies where there has been dereliction of duty to claw back the money paid.
In a country grappling with a crisis of accountability in the government, this is a welcome indication that some in the private sector aren’t willing to accept a similar dereliction of moral duty. This is something that, despite Cyril Ramaphosa’s smooth talk in parliament last week, the government can make no claim towards.
A glance at the ANC’s nominees for parliamentary committee chairs tells you all you need to know about any commitment to a "new dawn". There you’ll find Saxonwold regulars, a convicted fraudster, a premier so reviled that his constituents rioted for his removal, an MP under investigation for allegedly trying to bribe an inquiry evidence leader, and a former deputy minister who in 2018 did not deign to attend even one parliamentary committee meeting.
It’s shameful that they made it onto the ANC’s electoral list in the first place, never mind being entrusted with such an important part of the democratic process. But it starkly reveals the ANC’s regard for an institution that fine-tunes legislation and enacts oversight of the executive. What moral authority do you suppose Mosebenzi Zwane, Faith Muthambi or Supra Mahumapelo will bring to parliament?
At best, it suggests such a dearth of leaders that the ANC has to recycle incompetents. At worst, it shows the party cares little about sacrificing democracy for the pretence of unity.
Imagine a scenario where Steinhoff’s actions were applied at Lekwa, the Mpumalanga municipality that governs Standerton, where poultry producer Astral Foods can’t even get enough water to operate. It’s a municipality run by mayor Linda Dhlamini; at last count it owed Eskom R563m in unpaid bills, and it made a net loss last year of R356m. Last year even the regional head of Dhlamini’s own party, the ANC, tried to "recall" him, according to the Standerton Advertiser. But Dhlamini clung on, even as his municipality sank deeper into trouble.
If the Steinhoff example were to be followed in the government, Dhlamini wouldn’t just be out of the position he has tarnished by his incompetence, he’d have to pay back the R870,000 in taxpayer money he was paid last year.