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Expect action on Steinhoff soon – FSCA

There will be developments in a matter of months.
The financial regulator has the power to demand to see any document it deems relevant to an investigation. Picture: Waldo Swiegers/Bloomberg

Newly appointed director for investigations and enforcement at the Financial Sector Conduct Authority (FSCA) Brandon Topham told journalists in Cape Town on Monday that “the next two months will be interesting” in terms of the regulator’s investigations into Steinhoff.

At a media roundtable, Topham indicated that announcements will be made soon regarding charges against the company or individuals associated with it. Specifically these relate to one count of insider trading and one of publishing false and misleading financial statements. Other charges may well follow.

“Steinhoff [itself] published a SENS stating that its financial statements were wrong,” Topham pointed out. “So they have consented to the fact that they have published false and misleading information. Even though nobody at this stage has been charged, there is definitely a case to be made.”

PwC report

Significantly, Topham indicated that these charges are not dependent on any findings that may be made in the course of the independent forensic investigation being conducted by PwC.

“We have our own ongoing investigation dedicated to Steinhoff,” he said. “We have been working on the matter for more than a year.”

These statements were in response to speculation that Steinhoff may not release the full PwC report when it is finalised. It was meant to be completed by the end of 2018, but has since been delayed twice. This has led many to wonder if it will ever be fully aired.

However Topham indicated that while the PwC report was important, any action by the FSCA was not dependent on its findings.

“There has been some reliance by everyone in South Africa on the PwC forensic report because this is an extremely complicated group structure and fraud, by all indications,” Topham said. “It’s an extremely costly investigation to get to the bottom of.”

Apart from the expense involved, PwC’s investigation does have specific advantages.

“PwC was appointed by Steinhoff as an independent investigator to look at what went wrong,” Topham explained. “They have the expertise to do it, the international footprint, and the independence to deliver a report that theoretically any court in the world could use as evidence.”

The FSCA was however not waiting specifically for it to come out.

“I’m very happy to use the PwC report,” Topham said. “It will save everyone a lot of time and effort. But we have our own investigation under way. We are looking with interest at what might be in the PwC report that we don’t know about, but if we don’t get it very soon we will move without it.”

We will get the information we need’

He added that the Steinhoff board had offered the regulator its full cooperation to date.

“We have a meeting next week with Steinhoff to discuss the content of the report and what we are getting or not getting,” Topham said. “To date they have promised us their full cooperation. My interpretation of full cooperation is that you give us whatever we ask for – and anything we don’t ask for, that is relevant.”

Topham is also not concerned about Steinhoff burying the report as it is in the company’s interests to continue to cooperate – the size of any fine or administrative levy can be reduced based on the level of cooperation given to the FSCA’s regulators.

If, however, that is not enough incentive, the regulator has powers to demand to see any document it deems relevant to an investigation.

“We will get the information we need, either voluntarily or by exercising the powers available,” he said.

Regardless of the PwC investigation, however, he assured journalists that the FSCA would be announcing some of its own findings in the near future.

“If Steinhoff says we must wait another year for the report, I can’t wait another year,” said Topham. “That’s why we cannot only work with the PwC report.”

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thank you for this, i needed a smile … .. …

Surely there is enough evidence to lay criminal charges NOW against numerous execs of Steinhoff, past and present, if what is stated in the article is true

Hahahaha. We ALL want charges against Markus etc.

By, if you think a South African authority is going to bring then to justice you are just delusional. Not even the night Germans are able to prosecute and have all but given up.

What a joke. Maybe another ZAR 1 million fine from the JSE will do it. The Shoprite in Sandton makes that on a good weekend.

what has Shoprite got to do with Steinhoff?

I am pretty aware Shoprite is not part of Steinhoff. My point is the absolute joke the JSE fine of ZAR1 Million was. Then I created this thing called a comparison to show how a big retail store makes that in a weekend.

There’s….there is no shoprite in Sandton.

There is a Checkers in Sandton City.

@Barque, I have never seen yellow and red Shoprite plastic bags at Sandton. Checkers yes, not Shoprite….just like I have never seen a Pep Store in Sandton.

Stop being petty. Checkers Hyper is a Shoprite brand. It gets reported in the Group Financials. Yellow, blue, green. You’re just like all the Steinhoff naysayers who don’t see the opportunity in buying the share now.

Banks have come too far. They NEED to see SNH survive. AKA every single day this group is alive, the higher the probability of long-term surival and share price resurgence. LATER.

Key point missed by most. The Hawks and NPA (forget about the toothless FSCA) do not have the capability to interrogate and understand the nature of this massive crime. The technical excellence needed to unravel Jooste’s financial manipulations is not present in those organisations. Don’t get your expectations up. We can only hope for an assisted suicide I suppose? Take Tigon … 12 years and they are still faffing around. In the US those cretins would already be 11 years into a 40 year stretch

This new fellow seems to have the right level of energy and enthusiasm. Thankfully the long serving (20 years +) previously immovable dinosaur he succeeded can no longer inflict Jurassic Park methods and consequences on the investing pubic.

Meanwhile in the real world Nissans CEO has been in Jail for three months . ..

End of comments.

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