#Steinhoff board, management don't know how accounting scandal happened

Published Jan 31, 2018


PARLIAMENT - Steinhoff board and management members were on Wednesday unable to answer questions from MPs on exactly what led to the accounting scandal which saw the international company's share price drop by more than eighty percent.

"Until we have those reports, not only from statutory auditors, but from the forensic investigations, we really do not know how this has happened," said Christo Wiese, the former supervisory board chairman and one of the biggest shareholders of the retailer.

Wiese, along with a large contingent of board and management, was briefing three parliamentary committees.

Also read: JSE says still investigating Steinhoff over accounting scandal

Acting board chairwoman Heather Sonn told MPs they were constrained legally in what they could say in public, but revealed that the company had reported the former chief executive Markus Jooste to the Directorate for Priority Investigation, more commonly known as the Hawks in South Africa.

Jooste resigned shortly after news broke of the scandal.

Wiese said he became aware of the accounting irregularities days before it was confirmed in early December. He was at pains to point out that the auditors who pointed out the irregularities in the 2017 financial statements had been the same company "paid handsomely" to do previous audits, the integrity of which are also now been questioned.

Have you read: Steinhoff's former chairman Wiese says accounting scandal like "bolt from blue"

Chairman of the supervisory board's audit committee Steve Booysen said, while initial reports of fraud at Steinhoff being investigated by German authorities surfaced in September last year, irregularities were only confirmed in December.

Jooste was asked to make a presentation to explain certain transactions and "more importantly the cash flow of certain transactions", said Booysen.

"Markus Jooste then did send an sms [text message] to me as audit chairman and the content of the sms really led me to the conclusion that that is confirmation of the accounting irregularities and then he later offered that evening to make his presentation for which he didn't pitch up..."

Booysen said Jooste tendered his resignation at 19h45 that same evening.

Also read: SA central bank checking whether Steinhoff broke FX rules

The Steinhoff team said it was due to meet with PriceWaterhouseCoopers who were appointed to do the independent probe into the debacle this week. 

- African News Agency (ANA)

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