Steinhoff was SA’s biggest corporate fraud, yet no arrests have been made
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Steinhoff was SA’s biggest corporate fraud, yet no arrests have been made

Steinhoff was SA’s biggest corporate fraud, yet no arrests have been made

By Karabo Ngoepe Time of article published 15m ago

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Johannesburg – With R21 billion in public funds squandered in what is said to be South Africa's biggest corporate fraud, it appears that no one wants to take responsibility and confirm how far the investigations have gone to recoup the funds from Steinhoff or to bring those involved to book.

Despite having taken more than 200 witness statements and the billions the PIC has lost in Steinhoff, law enforcement agencies seem to have lost the appetite to recover the loot.

This is in contrast to the gusto displayed when they went after officials from the VBS – dubbed the “great bank heist” where over R2 billion was squandered. Law enforcement agencies moved swiftly to make arrests and freeze the assets of those involved.

Currently, at least seven former VBS executives and directors are appearing before court. The seven accused are Tshifhiwa Matodzi, the former VBS chairperson; Andile Ramavhunga, the former chief executive; Phophi Mukhodobwane, the former treasurer; Sipho Malaba, he was an auditor at KPMG; Lieutenant-General Avhashoni Ramikosi, who was a non-executive director; as well as Ernest Nesane and Paul Magula, both of whom were representing the PIC. In October, the bank's former chief financial officer, Phillip Truter was sentenced to seven years for his role. He is now expected to turn state witness.

On the Steinhoff saga however, this week, Hawks spokesperson, Colonel Katlego Mogale declined to divulge the progress of the investigation. "Investigations are continuing," is all she was prepared to say.

Asked about the number of individuals being investigated, Mogale tersely said: "We cannot reveal that information."

The National Prosecuting Authority (NPA) itself did not answer specific questions sent and instead passed the buck back to the Hawks.

NPA spokesperson, Sipho Ngwema said: "Although the NPA is guiding the matter, the criminal investigation is by the DPCI as per our different mandates. Please refer your questions to them."

This week, Scopa declined to comment on the matter and referred all inquiries to the finance committee, which at first said Scopa should respond. A comment however never came.

Steinhoff has been hogging the headlines since 2017 when news broke out of the country's biggest corporate fraud amounting to €6.5 billion (R123bn) which was explained as an accounting error. The fraud also cost the Public Investment Corporation (PIC) close to R21 billion of investments. The PIC itself this week failed to respond to questions relating to the matter.

At the forefront of the so-called error were former Steinhoff chief executive Markus Jooste and seven others which ultimately led to a 95% decline in its share price. Despite that, none of them has been brought to book and the powers that be appear not to be willing to pursue them. Jooste was slapped on the wrist with a fine for insider trading for allegedly sending an SMS informing people to sell their shares within the company.

In November 2020, as part of the anti-corruption task team looking at pending corruption cases from various government departments and entities, the heads of the law enforcement agencies appeared before Parliament's public accounts (Scopa) and during this sitting, said the Steinhoff matter was among the top 10 cases being investigated by the Hawks.

National director of public prosecutions Shamila Batohi, who is also the co-chair of the task team, in dealing with the question of selective prosecutions, said at the time she was aware that they could be accused of being selective, targeting certain people and of being biased.

She said they had adopted objective and "very carefully thought-through" criteria which guided them in terms of the prioritisation of cases.

Batohi added that the Hawks and the NPA had been working closely on "the extremely complex case". "From the first day I took office, it has been on the agenda as a top-priority matter," she said.

With the back and forth of those tasked with bringing the matter to finality, political analyst, Dr Ralph Mathekga said the Steinhoff case was the biggest test of the extent to which our law enforcement can be said to be independent of corporate influence.

"If they still can't expedite a case as straightforward as that, then we have a severe problem. They always say it is a commercial matter that takes time, but that explanation is no longer sufficient. The German investigators have done a lot of work on Steinhoff, and we ourselves have not moved on Steinhoff," he said.

Mathekga added that the lack of appetite to prosecute and bring those responsible to book indicated that some people and organisations are viewed to be above the law and accountability.

"The explanation is straightforward; it appears there is a certain world where you and I and certain other companies live, and there is a word where Steinhoff lives. Why is it that South Africa continues to want to give us Steinhoff as a complex issue while it's a straightforward corporate fraud? Markus Jooste offloaded the shares at a certain point in time. We know what happened but they are telling us it takes time. It seems as if there is no will to pursue Steinhoff," he said.

The Sunday Independent

Original Article

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