File Image: Minister of Finance, Malusi Gigaba

HARARE  - Finance Minister Malusi Gigaba threw his weight behind regulatory investigations into the Steinhoff International scandal, while the JSE announced a probe into the retailer. 

Gigaba said he had requested the Financial Services Board, Public Investment Corporation, and the Government Employees Pension Fund to provide him with a report on the extent of exposure for retirement funds.

“The minister expects that this report will give assurances that the interests of the shareholders are protected, including their retirement and savings funds,” said Gigaba.

Gigaba said he supported the FSB’s independent investigation into possible false and misleading reports in terms of section 81 of the Financial Markets Act, as well as any related abuses regarding Steinhoff.  

The FSB investigation was over and above the internal JSE probe into the extent of the accounting irregularities at the furniture retail giant.  

“The minister is mindful that many retirement and savings funds may be adversely affected by the losses,” Gigaba said.

The FSB said on Tuesday that it was investigating possible insider trading in Steinhoff International shares. 

“Should any violations be found, the appropriate regulatory action will be taken in accordance with the legislation governing this area,” an FSB spokesperson said yesterday.  

There were also reports that the SA Revenue Service might probe Steinhoff subsidiary Steinhoff Africa Retail.

There was uncertainty as to the outcome of the investigations and on Wednesday Steinhoff International said it had approached PwC to investigate auditing irregularities. 

The JSE confirmed yesterday that it had launched an investigation into Steinhoff and also indicated that it had decided not to suspend Steinhoff International listing as calls mounted for the axing of the board.

The JSE said that it had launched an investigation into Steinhoff and at this stage there were “no compelling reasons” to suspend Steinhoff  listing, which is a primary listed on

Germany’s Frankfurt Stock Exchange and has a secondary listing on the JSE. 

“The JSE has considered all the facts and information at its disposal and has decided not to suspend the listing of Steinhoff International or halt trading of its shares in the South

African market. It should be noted that Steinhoff shares also continue to trade in Frankfurt,” the JSE said.

Steinhoff chief executive Markus Jooste quit after the group admitted to “accounting irregularities” late on Tuesday leading to the postponement of the group’s annual results which were expected on Wednesday. The JSE said it had requested details from the company regarding “the accounting irregularities”. 

Simon Brown, the founder of trading firm JustOneLap, said Steinhoff should come clean, fire the board and get a new independent board and review of all operations and deals from over the years.

“On the surface the acquisitions have been doing well but the truth is we now know nothing about the company and the true status of their results and profits and the best route is to stay well away until we do know,” he said.

Ian Cruickshanks, chief economist at the Institute of Race Relations, said the implosion of Steinhoff was also a blow for investor confidence in the South African. “It is going to raise fresh capital to expand or build businesses,” he said.