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Steinhoff removes two former executives amid accounts probe

Steinhoff International suspended former Chief Financial Officer Ben La Grange and ex-director Stehan Grobler.
The suspensions is the first action taken against current employees of the company since its accounting scandal. Picture: Moneyweb

Steinhoff International suspended former Chief Financial Officer Ben La Grange and ex-director Stehan Grobler in the first action taken against current employees of the company following an accounting scandal.

While both La Grange and Grobler stepped down from their roles earlier this year, they remained employed by the South African retailer on short-term consultancy contracts, Steinhoff said in an emailed response to questions Tuesday. Those contracts have been suspended as part of a investigation by PwC into financial irregularities that triggered a share-price collapse late last year.

Their departures extend culpability beyond ex-Chief Executive Officer Markus Jooste, who quit when the scandal erupted and is being investigated by South African police. La Grange, 43, worked as CFO under Jooste for almost five years. Grobler’s positions included company secretary and an executive director of treasury and financing.

La Grange’s lawyer, Chris Hessian, didn’t immediately respond to emailed questions or return a call made to his office. Grobler said by phone he was bound by confidentiality agreements and declined to comment further.

Asset write-off

Steinhoff’s crisis was triggered when Deloitte refused to sign off on financial results for the year ending September 30, 2017. The owner of Conforama in France and Mattress Firm in the US has since said its accounts will have to be restated back at least as far as 2015, and PwC is focusing its report on a string of third-party transactions and inflated profit values. The retailer has written off the value of assets by more than $14.5 billion, and has made it a priority to identify those responsible.

At the annual general meeting in April, Chairwoman Heather Sonn said that any current executive found to have been connected to the financial wrongdoing would immediately be removed.

Under Jooste and and La Grange, Steinhoff pursued a breakneck international expansion that included the $5.7 billion acquisition of pan-African retailer Pepkor and further purchases of Mattress Firm and Poundland in the UK. While all those businesses remain in operation, Steinhoff faces an uphill battle to keep the company afloat even after after agreeing to a debt restructuring with creditors last month.

The shares rose 2.3% in Frankfurt, where Steinhoff moved its primary listing from Johannesburg in 2015. The stock has lost 96% of its value since the scandal erupted on December 5.

La Grange may be legally ordered to appear before a South African parliamentary committee next week after declining to attend because his lawyer is unavailable, parliament’s finance committee said earlier Tuesday. La Grange had been willing to appear this week, his lawyer told the committee, only for the hearing to be postponed because Steinhoff representatives are at a court hearing in the Netherlands.

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It is unthinkable that the financial statements of an international group can be grossly overstated for at least three years in a row (as is the case) without the CFO being integrally involved in falsifying such statements or for him to not have been painstakingly aware of the collaboration to the produce gross misleading financial information.

This should have been clear already when the Deloitte auditors refused to sign off the 2017 financial statements of Steinhoff International in Nov 2017 (nine months ago). The slow reaction of the board to act decisively and swiftly to rectify crucial issues and to urgently restructure the operations of the group in order to limit the free-flow capital bleeding and value destruction, are part the current reality of an inability to rescue Steinhoff.

France, I could not agree more with your points. It seems he was paid R50mil to turn a blind eye and to look the other way. This money must come back and he should be locked up for the reckless manner he conducted his duties. How he could be asked to stay is impossible to understand.

Jan: somebody had to keep those shredders and email scrubbers going! Also, imagine the effort required to lose / elucidate all those hundreds of minutes of meetings that did or did not happen depending on legal advice when the time comes. These guys and Jooste will be same as Porritt – two decades of swanning about on stolen proceeds juggling the court process.

one consolation: EVERYBODY knows – even their hunting / golfing maatjies. Even mamma & pappa.

One other thing. He has now been implicated in the Jooste fraud. Its notable that he never came clean or owned up to any wrong doing. He must have lied about his role in the fraud in order to stay on as a consultant. He was let loose in the organisation even though he was clearly shown to be grossly incompetent to run the petty cash and given that he did not come clean I can imagine him doing his best to cover up his negligence and wrongdoing.

and they were paid how much as consultants…consulting on what..how to hide all the trouble?

ag frik man , just call a box a box , seems like fin fraud is acceptable und condoned.
gatvol of graft_condoned.

Also these bs_news seem to try und manipulate market movements, when i have lost 95% , this seems idiotic. w t france, Am i afeared to lose my girl-child’s tuition now, i gona try trade myself out now?

good fur you

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Mood:
Euphoria
Feeling superior to others

Behavioral:
Erratic, bizarre behaviors
Legal problems
Neglecting responsibilities at work or school

Psychological:
Reckless and risky behaviors
Break from reality
Unable to exert good judgment

Coincidentally also the symptoms of neurosyphilis

The sad part about this is that it would have been impossible for the balance sheet to have been manipulated with the assistance of only these few men. If so, the rest of the management and board members need to be charged with gross negligence. Also interesting to see that an attorney from BVPG is being used. They have been used in two other liquidated companies Mr Wiese was involved in. Recycling those who are trusted….

When will the acting CEO also be removed? Danie van der Merwe is so “tied to the hip” to MJ for the past 30 years it is just not possible he was not or did not know about the fraud and “sick” deals.

Agree he must have known they were joined by the hip

End of comments.

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