Steinhoff International’s chairperson, Heather Sonn has resigned following the acknowledgement of a conflict of interest with a company she was a shareholder in that transacted with Steinhoff.
Explaining her resignation, Sonn said: “A company in which I am a shareholder, Gamiro Ventures, unwittingly completed a transaction with a company, Geros Financial Services, that now appears may have been associated with and (indirectly) funded by the company.
“In December 2017 I requested that this transaction be placed on the list for investigation by PwC when a name in the shareholding structure of the shareholder of Geros was recognised as a name that also appeared in the Viceroy Report. Unfortunately, it has taken over two years to get to a conclusion as to the nature of the relationship between the company and Geros, but there were multiple priorities for the company at the time.
“Based on what is now known to me it would have required certain disclosures which I would have made had I been aware thereof.
“At the [Steinhoff] 2018 AGM I indicated that the company and the supervisory board would hold itself to the highest standards of governance, given the heightened sensitivity specifically relating to compliance and the desire to avoid any unnecessary challenges to the Company. It is therefore incumbent upon me to apply this standard to myself.”
Sonn is a major shareholder in an investment company called Gamiro, which is a controlling shareholder in a company called Blake and Associates Holdings. Blake includes among its clients the JD Group, which is owned by Pepkor, a subsidiary of Steinhoff.
Blake is one of a panel of external debt collectors contracted at “arm’s length” by the JD Group and is subject to the same terms and conditions as other service providers.
Steinhoff said the service relationship between the JD Group and Blake predates both the inclusion of the JD Group as part of Steinhoff and the date on which Gamiro acquired Blake.
In 2017 Gamiro procured an option to acquire an interest in Blake from (a subsidiary of) Geros. Sonn served on the board of Blake from May 15, 2017 until January 17, 2018.
In September 2018 Blake bought back its shares from Geros, and Gamiro subsequently acquired a direct interest in Blake.
Recently obtained information suggests that Geros may have been associated with and indirectly funded by Gamiro, which would then make the Geros transaction a related-party transaction.
Sonn has informed Gamiro that she was not aware of this at the time.
Peter Wakkie, vice chairman of Steinhoff’s supervisory board, commented that:
“It is important to note that Ms Sonn has in no way been found to have participated in the accounting irregularities at Steinhoff. Heather’s strong and calm leadership has been invaluable during the turbulent times that the group has faced since December 2017. On behalf of the Supervisory Board and the company, we thank her for her enormous commitment and dedication to the group and wish her all the best for the future. The Supervisory Board will appoint a new chairperson shortly.”