PwC looking to complete Steinhoff probe by end-2018

Company officials at restructuring meeting in UK.
Steinhoff has reported Markus Jooste to the Hawks police unit over suspected corruption. Picture: Moneyweb

Auditors PwC hope to finalise a forensic investigation into the affairs of crisis-hit retailer Steinhoff International by the end of the year, a senior investigator said on Wednesday.

Steinhoff, which has more than 40 retail brands that include France’s Conforama and British chain Poundland, is fighting for survival after admitting “accounting irregularities” in December, wiping about 85% off its market value and triggering a liquidity crisis.

Louis Strydom, who heads PwC’s African forensic services unit told a joint committee meeting of parliament looking into the Steinhoff scandal, that the auditing firm was dealing with a conglomerate consisting of more than 700 individual entities operating in 32 jurisdictions.

“This is complex, it’s not simple. We are working with a team of people across seven countries in the world,” he said.

“Our aim is, between now and the end of the year, to package this and put it in a box and conclude our investigation,” said Strydom.

Around 3.3 million records, such as emails, have so far been sent for analysis as the contents of laptops and mobile phones are copied by investigators, he said.

Regulators from South Africa, Germany and the Netherlands are combing for clues and possible culpability in the spectacular fall from grace of the sprawling retail empire.

On March 1 the Johannesburg Stock Exchange suspended trading in Steinhoff’s bonds and preference shares after the company failed to submit its annual reports on time.

Steinhoff’s executive officials did not attend parliament on Wednesday and were instead at a strategic meeting in Britain to discuss its restructuring and liquidity, a company lawyer said.

“It has to make crucial decisions in regard to this restructuring, it has to meet with its global and local lenders,” Robert Driman told parliament.

Police inquiry

The scandal led to the resignation of senior executives including CEO Markus Jooste on December 5 and chairman Christo Wiese, who helped oversee the company’s rapid expansion over almost two decades.

The former CEO has not made a public statement since and could not immediately be reached for comment on Wednesday.

On Tuesday, Jooste sent a letter via his lawyers saying he would not attend the parliamentary inquiry over fears it could prejudice possible criminal investigations against him.

Steinhoff has reported Jooste to South Africa’s elite Hawks police unit over suspected corruption and Jooste would likely be subpoenaed to appear in parliament, the joint committee decided.

Wiese has not been accused of wrongdoing.


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Tip for PWC:

Focus on the transactions that are journal entries (as opposed to cash register).

Focus on the transactions with lots of zero’s

Focus on anything that involved sale of debtor books and investment income – doubtful there is much in revenue or cost of goods to find as Jooste had a lot of horses and a kept woman that are quite time consuming.

There, can be done by May Day

End of comments.



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