Nicola Mawson
The legal process against those implicated in what is the biggest corporate scandal to have hit South Africa so far – Steinhoff’s accounting disgrace and subsequent liquidation – has not resulted in any court cases.
Steinhoff International was liquidated last year after it was found that some executives were involved in corporate fraud amounting to €6.5 billion (R134bn), which was explained as an accounting error. The deception also cost the Public Investment Corporation (PIC) close to R21bn in investments.
Several people have been named in allegations surrounding Steinhoff’s implosion. One of them is former CEO Markus Jooste, who allegedly killed himself before any real action could be taken against him.
Jooste had been embroiled in court cases in Germany, where Steinhoff was also listed, and, at the time of his death, was under investigation by the Directorate for Priority Crime Investigation (DPCI), also known as the Hawks in South Africa, in a criminal case and was set to face penalties of up to R15 million or 10 years’ imprisonment, or both.
His death also came a day after the Financial Sector Conduct Authority (FSCA) fined him R475m, the largest yet fine by the authority against an individual, for accounting irregularities at the company.
The FSCA is now going after Jooste’s estate to secure the money. Its comment was that it had lodged the claim with Jooste’s estate, which is currently with the executor who has yet to acknowledge the claims.
The South African Reserve Bank (SARB), on the other hand, has seized more than R500m from Berdine Odendaal, then Jooste’s rumoured romantic partner at the time of his death. Among the items seized was a property valued at R18m, as well as millions of rand in bank accounts.
Raymond Paola, who was the divisional head at the SARB’s Financial Surveillance Department, was accused of facilitating billions of rand out of South Africa on behalf of Steinhoff through 16 exchange control applications, contravening a litany of the bank’s rules governing cross-border transactions.
Paola, according to a Scorpio investigation, resigned before an internal probe could happen. In addition, the SARB reportedly laid a complaint against Paola with the Hawks.
The Hawks spokesperson, Brigadier Thandi Mbambo, last week said she can only “comment on those which have already been arrested”.
Another former SARB employee, Chris Grové, was also the subject of a Scorpio investigation. He allegedly worked closely with Paola but co-operated with the Reserve Bank.
The central bank said it “does not comment on any investigation of individuals or entities, previous or current”.
In June, Steinhoff’s former chief financial officer, Andries Benjamin le Grange, was released on R150,000 bail after appearing at the Pretoria Specialised Commercial Crimes Court on charges of fraud. The trial is set down for October.
Another former Steinhoff director, Dirk Schreiber, who was the chief financial officer for Steinhoff Europe, was implicated in the fraud, with the FSCA finding that he also published deceptive statements about the company’s financial standing that omitted material facts.
He co-operated with the Authority and escaped an administrative penalty. Schreiber was sentenced to a 3.5-year jail sentence, with one year suspended, by the German court a year ago.
Legal head Stephanus Grobler was also arrested and is out on R150 000 bail, and will appear in court again in October.
BUSINESS REPORT