Though not confirmed if it was precipitated by it, the news follows reports that former Steinhoff chief executive Markus Jooste advised friends via a cellphone text message to sell the retailer's shares days before the stock collapsed.
According to the FSCA’s Thobeka Jojozi, insider trading is being probed in the seven trading accounts that sold off shares during the period from November to December 2017. The trading accounts under investigation belong to individuals, trusts and corporate entities.
“We have investigated the share trading on these accounts to establish whether it may have been undertaken by parties who were in possession of inside information regarding the alleged accounting irregularities and Mr Jooste’s resignation as CEO,”Jojozi said.
The probe is close to completion. The trading-accounts investigation is one of three cases the FSCA has registered.
The second probe focuses on Steinhoff’s release of audited 2015 and 2016 annual financial statements and its 2017 interim results.
The third involves a report by short sellers Viceroy published on December 7 last year, less than 48 hours after Steinhoff’s shock announcement.
The FSCA is receiving assistance from foreign regulators and has interviewed numerous individuals and obtained “extensive” documentation, it said. Once the PwC probe has been concluded, it's possible that further investigations into insider trading and false and misleading statements may be initiated, the regulator said.
“We are aware that PwC are conducting a forensic investigation and their findings will be taken into account in our investigation. We have made good progress regarding this investigation,”Jojozi said. She said the FSCA was also investigation deals with the Viceroy report which was published on December 7 last year after Steinhoff announced on December 6 that it had launched an investigation into alleged accounting irregularities and that its chief executive had resigned.
Once the PwC forensic investigation has been concluded it is possible that further investigations into insider trading and false and misleading statements may be initiated based on the findings of that investigation.
Calls have been made for stern action to be taken against those implicated in the Steinhoff accounting saga to not only recover pensioners' money but also institute criminal action and jail-time for its erstwhile chief executive Markus Jooste. Equal criticism has been darted at Viceroy, authors of the report that blew the whistle on Steinhoff.
SA Reserve Bank Governor Lesetja Kganyako recently said Viceroy Research, a short-seller that had targeted two local companies this year, was profiting unethically from its reports and had escaped sanctions from local regulators because it was domiciled elsewhere.