Steinhoff got nod to list on Marcus’s watch

Published Oct 3, 2019


CAPE TOWN - The South African Reserve Bank (Sarb) approved embattled Steinhoff International’s listing on the Frankfurt Stock Exchange under the governorship of Gill Marcus. 

Marcus, who is currently assistant commissioner at the Commission of Inquiry probing alleged impropriety at the Public Investment Corporation (PIC), served as governor of the Sarb from July 2009 to November 2014. On June 23, 2014, Steinhoff announced that it had received formal approval from the central bank’s Financial Surveillance Department within the framework of the exchange control inward listing rules to seek a listing on the prime standard of the Frankfurt Stock Exchange. 

“Steinhoff intends to commence with the listing process as soon as possible, subject to prevailing market conditions, after the release of its June 30, 2014, audited annual results in early September 2014,” read a Steinhoff SENS statement. 

Shortly before the listing, the Financial Surveillance Department issued a circular amending the exchange control rules, to a limited extent, to allow South African companies to list on stock exchanges located offshore and raise foreign loans and capital more easily.

Marcus is also the executive director of the Knysna Initiative for Learning and Teaching (Kilt), a non-profit organisation (NGO) that has received donations from Steinhoff. Kilt was established in 2017 with Marcus’s assistance. Kilt’s annual report shows that between January 2019 and December 2019, it had a budget of R24.7 million. Steinhoff donated R10.9m to the NGO during the 12 months ended February 28, 2018. 

The report noted that the NGO had become dependent on Steinhoff, and there was uncertainty whether the group would continue donating to the NGO given its financial difficulties, even though Steinhoff had committed to continue its funding. Steinhoff executives were widely expected to appear before the PIC Commission of Inquiry – led by Justice Lex Mpati, assisted by Marcus and Emmanuel Lediga – after the asset manager lost billions of rand worth of investment in the listed company. 

The commission, responding to a question why Steinhoff had not been asked to testify, said that it was only required to look into the question of impropriety on the part of the PIC, tacitly suggesting that the investee companies were not part of its focus. 

The PIC was being probed on several allegations of dubious governance issues with regard to its investments in various companies that included Steinhoff. A host of black-owned companies’ executives were made to appear before the commission and no executive from Steinhoff, save for Jayendra Naidoo, whose involvement with Steinhoff was through Lancaster 102.

Lancaster 102, the special-purpose black economic empowerment vehicle set up for a share transaction, has started legal proceedings in a R12 bilion claim against Steinhoff.

Steinhoff faces investigations or legal action from entities such as the JSE, the Financial Sector Conduct Authority, the Department of Trade and Industry, and the Companies and Intellectual Property Commission, as well as two class-action lawsuits in Germany and the Netherlands. Marcus was elected a Member of Parliament in 1994 and became Deputy Minister of Finance from 1996 to 1999, serving under Trevor Manuel. In 1999 she became Deputy Governor of the Reserve Bank under Tito Mboweni. 

She held the post for five years, but left due to a personality clash with Mboweni. In July 2009, former President Jacob Zuma announced that she would return to the Sarb to succeed Mboweni as governor.

Marcus was also the non-executive chairperson of the Absa Group from 2007 to 2009 and has served on the boards of Gold Fields and Bidvest. Diversified mining group Glencore appointed Marcus to serve on the board as a non-executive director in December. Glencore buys and sells coal and other commodities, and is one of the top coal exporters in South Africa. 

The question that arises is could the PIC commission have simply been used as a form of “McCarthyism”, making accusations of corruption among black-owned companies using a legal platform, while turning a blind eye to the former JSE darling that misrepresented its accounts to shareholders?