Steinhoff’s long-awaited probe into an accounting scandal that almost destroyed the South African retailer in late 2017 found that a small group of former executives and other non-Steinhoff executives structured deals that “substantially” inflated profits and asset values.
The forensic report by auditors at PwC said a number of deals were implemented over several years that enabled Steinhoff to artificially boost earnings. The summary of the report didn’t identify any of the executives involved and said that former CEO Markus Jooste has not yet made himself available for an interview with PwC investigators. Jooste, who has already been referred by the company to a local anti-graft police unit known as the Hawks, couldn’t be reached for comment as his phones didn’t ring. His lawyer didn’t immediately respond to an emailed request for comment.
Jooste didn’t do it alone. A myriad of third-party deals allowed the retailer’s accounts to be manipulated. About 100 auditors at PwC labored on the report for well over a year, and pushed back an original deadline of end 2018 due to the complexity of the work. The publication may trigger a domino effect as Steinhoff’s new management, plus regulators and law authorities around the world, seek to bring those responsible to account. Steinhoff can now proceed with publication of 2017 and 2018 audited earnings, needed to show the retailer is keeping sales moving as Steinhoff aims to finalize its debt restructuring.
Read the investigation summary here.
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