Steinhoff board knew of audit problems as far back as September

According to chair of the audit committee, Steve Booysen.
Steinhoff audit committee chair, Dr Steven Booysen has revealed that the company’s supervisory board was first informed of problems with the year-end audit on September 25 2017. Picture: Bloomberg

In an announcement that will raise more questions concerning who knew what and when, the chair of Steinhoff’s audit committee has told Moneyweb that the board and executive team knew about problems with respect to the 2017 financial year-end audit before the company’s financial year had concluded.

Dr Steve Booysen responded to questions regarding when the company’s supervisory board (board of directors) was first informed of problems with the year-end audit, stating that he received a letter from Deloitte on September 25, 2017 expressing concerns regarding entries in the ‘group’s draft accounts’.

This seems to directly contradict other statements members of Steinhoff’s supervisory board have made regarding developments that ultimately came to a head almost two-and-a-half months later on December 5, when Steinhoff announced the resignation of CEO Markus Jooste and an investigation into accounting irregularities.

In Booysen’s own words:

“As reported in the SA Parliament, the auditors raised questions with executive management regarding some entries in the group’s draft accounts and on September 25 2017, the auditors, Deloitte, addressed a letter to the audit committee chairman about these concerns. The audit committee chairman kept the members of the audit committee and then the chairman of the Steinhoff supervisory board [Christo Wiese], informed of developments as the process unfolded. 

At a supervisory board meeting on December 3, the board was informed that it would not be possible to issue audited accounts. This was followed by an audit committee meeting on December 4 to which the CEO was invited to answer specific questions. He never arrived at the meeting and provided no answers. Instead, the CEO resigned on December 5. The supervisory board then commissioned the PwC forensic investigation.”

When presented with the same questions, Deloitte was more tight-lipped, saying only that it “had raised a series of questions in order to obtain information that would assist in finalising its audit opinion. It was determined, in consultation with Steinhoff NV, that answers to these questions could only be obtained through an independent investigation”. This last sentence appears to indicate what triggered the decision to hire PwC to look into the matter.

Booysen’s comments however appear to directly contradict representations made by Steinhoff’s previous chairman and largest shareholder, Christo Wiese, when appearing before Parliament’s joint committee hearing into the matter earlier this year as reported by Moneyweb and other media. He stated then that, “I became aware of the impeding problem three working days before the accounts had to be finalised for the board meeting in December. It was absolute turmoil”. Wiese further described the revelations of accounting irregularities as a bolt from the blue.

Wiese did not respond to Moneyweb’s questions prior to publishing.

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In short( no pun intended ) -follow the money, investigate trades made @ 25/09/2017 and shortly there after by Wiese and CEO & board members , the use full force of the law to prosecute if there was insider trading effected

If it smells like a rat, squeaks like a rat and looks like a fat rat, it (MJ) most probably is a rat.

Desguised inside trades done by Wiese (the ex-chairman) and the other board members by taking lots of risky high loans against their Steinhoff shares, because otherwise it would be easily picked up as a criminal inside trade to sell before the crisis hit, and so they waited until the bad news went out in December, and then the banks started to sell the shares on their behalf to recover the loans, and so the ex-chairman and board members can just say that they’ve never knew what’s happening and that their Steinhoff shares that were sold (definitely at relatively good prices) were not sold by them (to avoid being branded as obvious inside trades) but were sold as forced sale by the banks to cover the loans, and so they get out with a good amount of money, and accusations of inside trades can then be defended as forced sale.
Wiese (the ex-chairman) and the other board members knew of the accounting rot about 3 months before it was announced (maybe even before), yet they didn’t announce it at the time, and some of them went and took even more loans against their Steinhoff shares so to have more of their shares sold quicker and at relatively higher prices.

Bolt from the blue hahahaha

It was only at the supervisory board meeting on December that the board was informed that it would not be possible to issue audited accounts.Prior to this it appears there were only suspicious /unconfirmed irregularities.

The chair of the audit committee disagrees with your assessment

“Dr Steve Booysen responded to questions regarding when the company’s supervisory board (board of directors) was first informed of problems with the year-end audit, stating that he received a letter from Deloitte on September 25, 2017 expressing concerns regarding entries in the ‘group’s draft accounts”

This cannot be the same Wiese who is suing Steinhoff. My sense is he knew of the wrong doings all these time and he went along due to his greed.

So, Markus snubbed both his company’s audit committee and the parliament. A sure sign of an innocent man.

Remind me…when was the loans to Wiese and Jooste approved by the board

Someone needs to do time behind bars

All the directors should be in jail!

Oom Christo Wiese – – – as your lawyer (not) I would advise you to come clean, pronto, before your lies and obfuscation are overtaken by further disclosures and Jooste’s Plea Bargain being struck as I write this.

Mr. Wiese,

Please be advised that your invitation to the Steinhoff restructuring meeting has been revoked. We suggest you buy some Steinhoff Shares at these levels if you want to participate in any capacity.

“We are the captains now”.

Sincerely,

ALL THE BANKS.

Hats off too Deloitte for raising the flag – we always focus on the guys that get it wrong and do not give kudos for the guys that gets it right.

I am bracing for the avalance of negative comments to come!

Not placing my comment Warren?
Censorship?

Let’s just try to look at this in a more balanced way.

From my accounting working careers I’ve learnt that big errors are not spotted on day 1. In fact, they are missed, often for many years, by people/departments, yes also by heads/audit. I did see this – more than once. Please believe me. Wish I had space to explain.

Most directors at SH joined not long ago. You have to find your feet, to really understand the books of a firm of this size.

True – a social worker spotted this. And this will forever count against the directors. My only explanation is that in a firm this size there are various angles that each oak comes in from.

Complacency and trusting Prince Jooste are huge factors, yes. As with similar ‘accidents’ throughout history of mankind.

But to say anyone of us experts would have smelled this on day one, or year one, is so easy to claim now.

I agree fully, on the social worker, they were not coming from an audit angle (checking the entire operation) but by looking for a specific possible “bad event” or tell tale sign to short the stock. So skill is not involved when doing this.

Wiese (capfin) was doing dodgy deals with SNH. If I do a crooked deal with you how can you believe I am not a crook? Pieter Erasmus was a director on southern view finance where some of the dodgy deals were done. Are you telling me Pieter and Christo never discussed these issues? I think it is about time some light was shone on Pieter Erasmus. I want to hear what he has to say

Also, being offered SNH shares to the value of 46 times Pepkor earnings must have raised the alarm bells for Wiese.

Correction – the social worker did not spot anything. He got inside information from someone who worked in a firm that provided services to the Australian subsidiary of Steinhoff. Viceroy really get much more credit than what is due to them

Dr Booysen joined the Steinhoff Board in 2009 so he had 8 years to attune his sense of smell.

Secondly this is a man whose doctorate is in Accountancy from the University of Pretoria so he isn’t as dumb as me when it comes to interrogating such matters.

I’m afraid the time has come to see this for what it is – a good old fashioned “Enron-esque” fraud which everyone chose to ignore while the going was good.

CJ1:

1. Many people said this was crooked years ago, mainly on scepticism of the board composition and a laundry list of restatements, change in reporting currency, chnage in HO – journal entries galore

2. The board was a concern – bunch of hired help with zero industry experience, and all groot maatjies

3. When your company sells tens of billions of receivables to XYZ, not for cash but on loan account, do you not think that basic, basic, basic governance forces directors to ask : maar wie is hierdie mense? The answer was Wiese and former Steinhoff directors. I do not for a moment believe that the board did not know that they were pulling a scheme to convert problematic assets and boost income. It simply ran away from them like a snowball : you can hide R100m, you can try R1,000m but when the scheme balloons to billions, you lose control of the dialogue

it is obvious that Viceroy worked on inside information, there is no way they figured all this out by themselves. There’s a little bird somewhere in Deloitte, somehwere in Steinhoff…

Not rue – the Portsea report was written the middle of last year and has more detail than Viceroy. All referenced from public information. In Europe you can get detailed information on private companies.

Maybe they read the Portsea report last year??

The recent interview a few weeks ago with Mr Wiese on Moneytalk 702, when questioned with regards to these allegations he stated that his answer to this often asked question was “what sane person would do such a thing…” (maybe not the exact words). I tend to believe him due to his own personal losses and that although Booysen’s states “….the auditors raised questions with executive management regarding some entries in the group’s draft accounts and on September 25 2017…” it does not give details of the questions raised which leaves us to only speculate on the details. I would also suggest that when these questions were raised the guilty parties then had an opportunity to allay any fears of those in trust with them. In time all these innuendo’s will be revealed.

MrJones:

Do you know that Wiese owned the companies that bought Steinhoff doubtful debts? Most of his “losses” were in effect never assets. They built a house of cards, saying that the house fell in on them is not evidence in mitigation. His R50b loss was never worth R50b

A person who is trying to get their money out of SA!! Clearly that was the only rationale for selling Pepkor into SHF. The real question is why did the PIC facilitate this??

The saying comes to mind: “You are as good as your last action.”

So much for all the highly qualified professionals, dripping with degrees and doctorates.

Not their finest hour.

Christo Wiese has paid almost R60bn for his foolish trust in MJ. This notwithstanding lots of advice to the contrary. To think he would be an orchestrator of the mess and risk an investment of this size in a company he had helped build for almost 50 years is stupid. That he may have been made aware of the impending crisis a few days / weeks earlier by the red flags of auditors does not make him complicit. Stupid, Greedy and maybe even dementia coming on yes, but not to the point of planning this with MJ, no!

Steinhoff has been fascinating show to watch in terms of human thinking.

Camp one : those that said years ago they would not urinate on this fire.

Camp two : the believers. Jooste was the crook, it will blow over, R12 a share is a bargain. Hold

Camp Three : surely this will not go to zero, buy

I am firmly of the belief that this circus will, for central shareholders go to negligible value after a bunch of thieves extract assets at 30p on the pound.

Campe 4. You must then be short the stock if this is going to happen?

But I guess not. People that short and actually take action don’t post on message boards.

No one knows what is going to happen. Not even the banks, which is why the share price is just waiting around.

One of the thieves will be Wiese.

The story must ring something like this…Jooste was running (at the time) a “very successful” leveraging engine. He and Wiese got talking after a couple of bottles of Lourensford’s finest and Jooste said to Wiese: “Bring your fortune and I’ll multiply it” Insatiable greed kicked in and Wiese said “Of course, you have been doing this for years, I want in!”

Someone previously says that they believe Mr Wiese “due to his own personal loss”
There have been NO personal loses made by Messrs Jooste and Wiese. The loses are being carried by the banks, Insititions and independent shareholders ( Joe Public)
That’s the beauty of this theft – those that planned and orchestrated this won’t lose a thing unless there is class action taken by those that were duped!

End of comments.

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