Home News outh African state fund wants a part in Steinhoff’s accounting scandal probe

outh African state fund wants a part in Steinhoff’s accounting scandal probe


JOHANNESBURG – South African state pension fund, PIC, the second-largest investor in Steinhoff said on Wednesday it would ask for a seat on the board committee investigating accounting irregularities at the South African multinational retail group.

Steinhoff’s share price has plunged since announcing last week that its chief executive had quit and that it had found problems with its accounts which has delayed the reporting of its financial results.

The Public Investment Corporation (PIC) is the second largest shareholder in Steinhoff with about 10 percent, behind retail tycoon and Chairman Christo Wiese who took the helm last week following the departure of Chief Executive Markus Jooste.

”The PIC will insist on representation on the board Committee tasked with investigating the Steinhoff situation, so as to ensure that the process is transparent, the fund manager said in a statement.

The PIC, which manages nearly 2 trillion rand worth of civil servants’ pensions savings, said the 80 percent drop in Steinhoff’s share price would result in a 0.6 percent loss for its investment portfolio.

By 1628 GMT shares in Steinhoff were down about 18 percent in Johannesburg and Frankfurt, where it has a primary listing. The stock has dropped around 80 percent since last Wednesday, wiping around $12 billion off its market value.

The fund manager also said there was the risk of a possible conflict of interest in having Wiese serve as the interim CEO and wanted the appointment of at least two independent non-executive directors to the board.

Steinhoff, which moved its primary share listing from Johannesburg to Frankfurt two years ago, has been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg, Germany since 2015. Four current and former managers are under suspicion of having overstated revenues at subsidiaries, prosecutors said.

It has previously said this related to whether revenues were booked properly, and whether taxable profits were correctly declared.

($1 = 13.5829 rand) (Reuters)

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