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Accountability monitor: Steinhoff execs face German justice

Remember the 2017 Steinhoff scandal? Senior execs at the furniture and household goods multinational blatantly cooked the books to falsely inflate profits. CEO Markus Jooste promptly resigned… but four years later has yet to be charged. It was South Africa’s largest-ever private sector fraud and accounting scandal, and the lack of arrests has made the public feel pretty cynical about corruption being tackled in the private sector. After all, this isn’t just a case of some rich shareholders losing some dough: given Steinhoff’s size, most pension funds would have had some exposure to its stock, and suffered when R200-billion was summarily wiped off the company’s market capitalisation after the scandal. That means ordinary people like you and me, and anyone with a pension or investment product in South Africa, would likely have been affected. 😠

Now Germany is leading the way: the country has charged three top Steinhoff executives for accounting fraud, which carries a maximum of three years in prison. Their system doesn’t allow for those charged to be named but it’s a fair bet one of them in Jooste – who may finally taste justice for what he did. Steinhoff was founded in Germany but later moved its headquarters here. It has a primary listing on Germany’s Frankfurt Stock Exchange and a secondary listing on the Johannesburg Stock Exchange.

So what’s taking South Africa so long? Well, consider that German public prosecutors had to conduct a six-year investigation before getting to this point. SA’s investigations started later, and our National Prosecuting Authority was of course decimated by years of state capture and needed to rebuild capacity to put together a case that could win in front of a judge. 

Meanwhile, there has been fresh unhappiness over Steinhoff’s donation of R30 million towards the investigation. But this donation is for the police, not the NPA, the latter clarified this week. It will fund auditing firm PwC’s forensic report into the complicated mess. While there are concerns about a possible conflict, various measures are in place to try and manage this. It’s just not that easy to do financial forensics… after all, look how long it took the Germans. 👀

Remember the 2017 Steinhoff scandal? Senior execs at the furniture and household goods multinational blatantly cooked the books to falsely inflate profits. CEO Markus Jooste promptly resigned… but four years later has yet to be charged. It was South Africa’s largest-ever private sector fraud and accounting scandal, and the lack of arrests has made the public feel pretty cynical about corruption being tackled in the private sector. After all, this isn’t just a case of some rich shareholders losing some dough: given Steinhoff’s size, most pension funds would have had some exposure to its stock, and suffered when R200-billion was summarily wiped off the company’s market capitalisation after the scandal. That means ordinary people like you and me, and anyone with a pension or investment product in South Africa, would likely have been affected. 😠

Now Germany is leading the way: the country has charged three top Steinhoff executives for accounting fraud, which carries a maximum of three years in prison. Their system doesn’t allow for those charged to be named but it’s a fair bet one of them in Jooste – who may finally taste justice for what he did. Steinhoff was founded in Germany but later moved its headquarters here. It has a primary listing on Germany’s Frankfurt Stock Exchange and a secondary listing on the Johannesburg Stock Exchange.

So what’s taking South Africa so long? Well, consider that German public prosecutors had to conduct a six-year investigation before getting to this point. SA’s investigations started later, and our National Prosecuting Authority was of course decimated by years of state capture and needed to rebuild capacity to put together a case that could win in front of a judge. 

Meanwhile, there has been fresh unhappiness over Steinhoff’s donation of R30 million towards the investigation. But this donation is for the police, not the NPA, the latter clarified this week. It will fund auditing firm PwC’s forensic report into the complicated mess. While there are concerns about a possible conflict, various measures are in place to try and manage this. It’s just not that easy to do financial forensics… after all, look how long it took the Germans. 👀