Steinhoff. Picture: BLOOMBERG/DWAYNE SENIOR
Steinhoff. Picture: BLOOMBERG/DWAYNE SENIOR

The FM and the amaBhungane Centre for Investigative Journalism have launched a joint application in the Western Cape High Court to compel Steinhoff to release the full forensic report on accounting failures and fraud compiled by PwC.

The application follows two separate requests filed earlier this year by the FM and amaBhungane under the Promotion of Access to Information Act for the 7,000-page report. Both were refused by Steinhoff on the grounds that the report contained "legally privileged" information, meaning it had been commissioned for purposes of obtaining legal advice and for use in litigation.

The investigation, which has reportedly cost Steinhoff shareholders more than R250m and is still under way, resulted in the company admitting that its assets and income were falsely inflated by as much as R105bn.

Steinhoff’s unfortunate attitude has sparked a number of copycat "investigations", also done by auditing firms, the results of which have also been hidden from shareholders on the pretext of "legal privilege". It’s a list that includes other scandal-racked firms such as technology company EOH and sugar producer Tongaat Hulett. This week, petrochemical giant Sasol joined the gallery.

At a time when corporate SA should be trying to rebuild trust with its investors and the public, it says much about the attitude of these companies to the King code invocation to be "open, honest and transparent" that they’ve taken this step.

In Steinhoff’s case, it even initially promised to make public the report into SA’s largest fraud, in which millions of pensioners lost an immense amount of money.

This week, Steinhoff confirmed it would oppose our court application, again asserting the report is "confidential" and subject to "legal professional privilege".

The FM and amaBhungane previously collaborated on an investigation into the fraud and felt it fitting they combine forces in this instance.

"The complexity of this crime means that it is likely to be years before any of the perpetrators face criminal consequences. It’s an outrage that the accused directors are still swanning around, using what appear to be the proceeds of crime," says Sam Sole, managing partner of amaBhungane.

In the absence of real transparency, who is to say that Steinhoff isn’t, for example, simply trying to hide details it finds awkward to explain? Or complicity by executives and directors that would embarrass it. It’s even more of an insult that the PwC report was paid for with funding provided by investors who Steinhoff now chooses to keep in the dark.

The FM and amaBhungane are represented by attorney Dario Milo and his team at Webber Wentzel, and advocate Steven Budlender. Both consider the case to be of enormous public interest. "This is an important case about the public’s right to know about exactly what went wrong, and how, at Steinhoff. In our view there can be no compelling basis for the secrecy that Steinhoff has employed in releasing the entire report to the public," says Milo.

As Sole puts it, some companies are now deliberately constructing investigations in such a way as to make the findings inaccessible via legal avenues.

"It’s a damning indictment of the morality of some corporates that … companies instituting forensic investigations are taking advice at the outset on how to preclude the findings from ever being made public," says Sole. "We want to challenge that."