Steinhoff scandal cost Government Employees Fund R20bn

Published Feb 1, 2018


DURBAN - The Government Employees Pension Fund (Gepf) lost about R20billion from the collapse of Steinhoff’s share price after the group admitted accounting irregularities.

This emerged from the hearings in Parliament yesterday when the Steinhoff supervisory board appeared before three parliamentary committees -the standing committees on finance, public accounts and public service and administration.

The Gepf said its Steinhoff shares were worth R24.1bn on November 30 last year but worth only R3.1bn on January 18 this year.

The Gepf holds 392million Steinhoff shares, about 9.1percent of all the group’s shares.

Senior National Treasury official Ismail Momoniat said up to R200bn in global shareholder value could have been lost due to the decrease in Steinhoff’s share price.

This would have affected global and South African investors, both private and institutional, he said.

“For the crimes that have been committed, people must go to jail,” he said.

The Public Servants Association of SA (PSA) and the Public Investment Corporation (PIC) reported this month that they would be pursuing a class-action lawsuit against Steinhoff to recoup around R17bn of pensioners’ money that was wiped out in the wake of the accounting scandal.

The PIC is the investment manager of a number of state funds, including the Gepf, whose members include PSA members.

The Independent Regulatory Board for Auditors (Irba), which has jurisdiction over registered auditors in South Africa, also raised concerns about Steinhoff but said it had not yet been able to go through the documents it was provided on Monday by Deloitte, Steinhoff’s auditing firm.

Irba’s chief executive officer, Bernard Agulhas, said: “We haven’t been able to pull our staff off the KPMG investigation and other big investigations.”

He said Deloitte had delivered a “massive” cache of electronic files.

Agulhas said earlier Irba was set to start its investigation into Deloitte’s auditing of Steinhoff next month and they were entering into separate memorandums of understanding with regulators from Germany and the Netherlands.

The Irba probe would take up to 36 months to complete.

“The investigation would cover whether Deloitte missed any accounting irregularities, and/or broke Irba’s code of ethics,” he said.

Steinhoff acting chairwoman Heather Sonn said the PwC investigation would independently establish the facts.

“The scope of the investigation is unlimited and includes all supervisory and management board members, including audit and risk committee members.

“We will uncover the truth, fix what went wrong and prosecute wrongdoing.

“The matter is now in the hands of the Hawks for further investigation and prosecution,” Sonn said.

Jooste was not present and informed the committees through his lawyer that he would not be attending yesterday’s hearing.

Sonn undertook to share the findings of the forensic investigation with regulatory bodies once it was completed.

Steinhoff also indicated it would consult its lawyers to check whether it could make the charges against Jooste available to members of the committee.

The Steinhoff supervisory board said it had reported Jooste to the Hawks for suspected offences in terms of the Prevention and Combating of Corrupt Activities Act.

Former Steinhoff board member Christo Wiese said he became aware of the irregularities only three days before they surfaced, adding that the irregularities came like a bolt out of the blue.

“It was absolute turmoil,” he said.

Wiese was confident the investigations would shed light on the irregularities.


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