DURBAN - Embattled retailer Steinhoff International is being investigated by the Hawks, and three cases related to allegations of fraud at Steinhoff and its subsidiaries have been reported after the group submitted a series of allegations against former chief executive Markus Jooste.
Minister of Police Bheki Cele confirmed on Friday that the Hawks were investigating Steinhoff and that two of the cases were reported in Stellenbosch and one in Johannesburg.
One of the Stellenbosch cases includes theft, extortion, forgery and a failure to report knowledge of wrongdoing. Jooste resigned from his post in December after the group admitted to accounting irregularities which led to a decline of more than 95 percent in its share price and losing about $12 billion (R164.41bn) in market capitalisation.
A member of the supervisory board, Steve Booysen, submitted the report against Jooste to the Hawks at the end of January. Steinhoff ’s report accuses Jooste of being party to the falsification of accounting records, providing false or misleading information with a fraudulent purpose, being party to an act or omission by Steinhoff calculated to defraud creditors, employees or shareholders, and being party to untrue written statements required by the Companies Act.
However, during the presentation of its half-year results on Friday, Steinhoff confirmed that it has opened a case against its former chief executive.
“As a result of matters arising from the ongoing investigations, the chair of the audit and risk committee has reported the former chief executive, Markus Jooste, to the South African government’s Directorate for Priority Crime Investigation, the Hawks, under section 34(1) (b) of the Prevention and Combating of Corrupt Practices Act of 2004.
“This matter is now in the hands of the Hawks for further investigations and potential prosecution,” the group said. Steinhoff is facing its own problems, besides the liquidity constraints. It is being sued by a Dutch investor group. And its former chairman, Christo Wiese, is also suing the group for R59bn. However, the group said in its results that in light of the ongoing investigation, there remained legal and other constraints on what the group can communicate. “The company has therefore decided not to hold a press conference or webcast, as with previous results announcements. The company has, however, included as much information as possible in these unaudited interim results in order to assist users in this regard,” the group said.
In the long awaited results for the six months to the end of March, Steinhoff reported a 6 percent decline in revenue to €9.35bn (R149.63bn), down from €9.90bn compared with last year. Gross profit declined by 10 percent to €3.65bn, from €4.07bn.
Operating loss escalated to €381 million compared with the loss of €168m, while the loss attributable to ordinary shareholders was 63 percent higher to €621m compared with a loss of €380m that was reported last year. Steinhoff International’s share price gained more than 6 percent after the release of the results to R1.31 a share on Friday. However, it closed at R1.29 at the end of the day.
- BUSINESS REPORT