Steinhoff wants R850m from Jooste; Dodgy bookkeeping at municipalities; SOE rescue plans; Bitcoin keeps soaring

By Linda van Tilburg 

  • Steinhoff wants R850m from the company’s former CEO Markus Jooste. Legal papers filed in the High Court in Cape Town indicate that this figure includes his base salary, bonuses and other incentives paid to Jooste since 2009. In the same case ex-Chief Financial Officer Ben la Grange is being sued for R271 million. Steinhoff’s current executive is of the view that Jooste is chiefly responsible for the inflated asset values and dubious transactions reported by the beleaguered global retailing group. In the court papers, Steinhoff states that the payment of salaries and bonuses to Jooste and La Grange was dependent on sound and successful financial performance. They would not have been remunerated had the company been aware of all the facts. Steinhoff shares rose 3.25% on the JSE on the news. The company is in talks with creditors to restructure $12 billion of debt.
  • Irregular expenditure at municipalities reached R25 billion in the 2017/18 financial year according to Auditor-General Kimi Makwetu. He told a news conference in Pretoria there were only 18 out of 257 municipalities with clean audits, (7%) with the Western Cape having the highest number. Makwetu said accountability for financial and performance management continues to deteriorate in local government with pervasive control and monitoring failures in the 239 municipalities which did not receive clean audits. He says there were a number of control of monitoring failures – either the money has been misused or no one has dared to make ensure delivery of the project had been done in accordance with specifications and agreement. He says the AG recently received the power to issue binding recommendations.
  • Treasury Director-General, Dondo Mogajane has indicated to Eskom’s creditors that the importance of bailing out the utility is more important than protecting SA’s  Moody’s investment grade rating. This According to Bloomberg, Mogajane told Eskom creditors in London they won’t lose out in a restructure as he has laid out a timeline for the reshaping of the power utility. According to Bloomberg’s sources, an appropriation bill for the bailout would be approved by the end of this month; a chief restructuring officer and team will be announced in the middle of July; a plan to deal with Eskom’s debt within 18 months will be produced and Eskom will be unbundled in two years. Mogajane also indicated that he does not think these plans would lead to a downgrade.
  • More news from the State-owned enterprises is that arms manufacturer Denel’s employees will receive their full salary for June after all. This is after a lender came forward to help. Denel told employees earlier this week that they would not receive their full salaries due to a cash flow crisis. And Public Enterprises minister Pravin Gordhan says South African Airways is still an investable proposition, but that the airline needs to take urgent steps for a long-term turnaround strategy.
  • Mining stocks, which have been on a winning streak, came under pressure yesterday with Impala Platinum shares dropping by 4.5%, the first dip in its incredible recent run. A little bit of shine also came off the gold miners after their surge in share prices with Gold Fields down 4% drop, Harmony Gold, Sibanye and  DRDGold off down 2%; AngloGold Ashanti lost just under a percent. This follows the Federal Reserve downplaying interest-rate cuts in the US. The rand gained to R14.23 to the dollar after the U.S indicated that a trade deal between the U.S and China was 90% done. The JSE all share rose slightly. It is seen as a positive sign ahead of the G20 summit this weekend.
  • Bitcoin continued its upward climb soaring to its highest level in a year and a half. On the Bitstamp exchange, it rose as much as 10% to $13 000 which is also the biggest one-day jump in a month in Asian trading hours. It however pulled back as the Europeans woke up to $12 600. The euphoria about Bitcoin fuelled by what the Financial Times has dubbed Facebank is igniting other currencies with Ethereum up 5.5%. Bitcoin still trades below its 2017 peak of $19 000.