3 top Steinhoff execs in hot water as arrests loom - report
Three top Steinhoff executives could land behind bars by the end of this week if German authorities have their way. This is according to reports by a leading publication in the country, Manager Magazin.
It reports that the Oldenburg public prosecutor's office has now completed its investigation into the matter, which has been running since 2015. Oldenburg is near the town of Westerstede, where Steinhoff was founded.
The magazine didn’t name the executives but the furniture company’s CEO, Markus Jooste, and its former chief for Europe, Dirk Schreiber have been under investigation since the scandal broke.
Since the financial scandal was uncovered in 2015, no Steinhoff executives were brought to book, leading to widespread condemnation by the retailer’s shareholders who have incurred billions in financial losses.
If German authorities succeed in bringing the charges against three Steinhoff people for allegedly balance sheet manipulation, the offense is punishable by a maximum sentence of up to three years imprisonment, according to Section 331 of the German Commercial Code.
The probe into Steinhoff’s financial misdealing is two-fold, with the other part being conducted by the South African investigation unit, the Hawks. However, the local investigation of Steinhoff has been criticised for its slow pace. In response, there are reports that the Hawks lack the resources to finance a probe into the company.
Political parties have been calling for the arrests of the executives behind the scandal. Economic Freedom Fighters in parliament on Wednesday, questioned the National Prosecuting Authority on why the executives haven’t been arrested.
This is the biggest scandal in history, the arrest of the executives would set a precedence that white-collar crime can also be successfully prosecuted.
Though Steinhoff was trading just over 0.5% firmer at R1.86 a share as at 10 am on Thursday, on Wednesday the retailer’s market cap plunged by an astonishing 62% or R117 billion following the news of the looming arrests.
BUSINESS REPORT ONLINE