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EDINBURGH — South African entrepreneur Christo Wiese has been thrust into the glare of the international media as German authorities probe financial irregularities that have played out in front of him. Questions are being asked about the oversight role of the chairman and largest shareholder at Steinhoff, which has been on an aggressive acquisition path globally as it seeks growth opportunities beyond the dwindling South African economy. In the UK, Steinhoff owns Harveys, Poundland and Bensons for Beds. In South Africa is known for Ackermans, Pep and Russels. It has retail outlets in the US, Europe and Australia. Now that the Germans have raised the alarm that rot may have set in at the top of the dual-listed retail giant, it is possible other authorities will pay closer attention to the detail in Steinhoff reports elsewhere. The Steinhoff share price has collapsed as the news of the German investigation spooks investors. The Steinhoff fiasco has hammered the savings of South African unit trust holders. – Jackie Cameron
By Thulasizwe Sithole
Questions have been asked about the competence and oversight of South Africa’s wealthy retail tycoon Christo Wiese and his senior colleagues at Steinhoff.
The Financial Times of London cautions that the border between accounting scandal and fraud is marked only by the bars of jail. What’s more, it’s not yet clear on which side Steinhoff falls.
The Lex columnist notes that the South African conglomerate that has been growing aggressively in Europe is under investigation in Germany over suspicion that inflated revenue numbers made their way into the accounts.
Prosecutors are considering the validity and recovery of a staggering €6bn in assets.
However, in good news for Wiese, recently departed chief executive officer Markus Jooste and friends, the recent history of financial scandals illustrate that there is a very slow path to justice for corporate sinners.
The FT lists a number of scandals in which company bosses have got away with effectively crooking the books or justice has been delayed. These include:
- Indian software group Satyam admitting to manipulating its accounts in 2009, with its chairman sentenced only six years later;
- Let’s Gowex, a Spanish technology company, collapsed in 2014, with the chief executive telling fellow directors the accounts were untrustworthy and he was responsible. The case is ongoing;
- In 2015, the chief executive and chief financial officer of UK-listed tech group Globo resigned after telling the board that data had been misrepresented in the financial reports. Investigations are ongoing there, too;
- In 2002, Xerox admitted overstating revenues. There have been no guilty verdicts even though settlements have been paid by executives, banks and auditors.