Steinhoff dumps Deloitte; IDC wants R157m from Moyo; HK protests escalate; Trump raises China tariffs

By Alec Hogg

  • The business ethics of Old Mutual’s former CEO Peter Moyo are back in the spotlight after a dynamite disclosure in yesterday’s Sunday Times Business Times. The newspaper reports that South Africa’s Industrial Development Corporation is threatening to sue the Moyo-controlled NMT for R157m which the private company says it is unable to repay. The claim relates to money lent by the IDC to a construction subsidiary of NMT. Soon after the R157m loan was written off, NMT distributed a hefty dividend to its directors, including Moyo, by-passing preference shareholders, including Moyo’s then employer Old Mutual. The newspaper says Moyo’s private company redeemed these prefs owned by Old Mutual in Friday through a R46.5m payment. But Business Times adds that Old Mutual is demanding a further R21.6m from NMT for funds advanced to another of its subsidiaries – and the life assurer is urging Moyo’s company to repay the IDC’s R157m loan. Moyo was dismissed by Old Mutual in June over what the company terms a breakdown in trust and conflict of interest. Moyo was reinstated after appealing the dismissal in court, but was immediately fired again when arriving for work last month. That court action continues.
  • Violence flared up in Hong Kong over the weekend after tens of thousands of pro-democracy protestors occupied major roads through processions that stretched for miles. This was the 13th successive weekend of protests and was in defiance of an official ban on anti-government demonstrations. On Saturday, social unrest resulted in police firing multiple volleys of teargas and using jets of water, some with blue dye, to disperse crowds outside the Hong Kong government headquarters. Protestors, many clad in their uniform of all-black and some wearing gas masks, helmets and shields, tossed the teargas cannisters back at police and into the complex which serves as the Hong Kong headquarters of the China People’s Liberation Army. Others hurled Molotov cocktails and bricks towards the government building next door while a group started a huge fire blocking a road near police headquarters. Yesterday protestors targeted the airport, forcing the authorities to cancel the express rail link from the city centre, leaving hundreds of travellers stranded. The protests were sparked by a bill which proposed allowing extradition of Hong Kong residents to Mainland China, but has developed into a broader pro-democracy message to Beijing.
  • US President Donald Trump yesterday upped the ante in his trade war against China by slapping a 15% tariff on another $111bn worth of Chinese imports. Goods affected by the new tariff range from tools, footwear and clothing through to home textiles and technology products like the Apple Watch. Tariffs on a further $156bn worth of currently duty free Chinese imports like smartphones, laptops and toys was postponed until December 15. According to research by the US Federal Reserve previously imposed tariffs on Chinese imports are already costing the average US household $831 a year. China’s retaliatory measures also came into effect yesterday with US exports of soya beans, crude oil and pharmaceuticals hardest hit. According to analysts, Beijing’s hopes for a deal are waning with its strategy having switched to toughing out the turbulence by shoring up its own economy and waiting for US lobby groups to turn on Trump.
  • At its AGM in Amsterdam on Friday, Steinhoff dumped its long-time auditors Deloitte, replacing the firm with the much smaller firm Mazars. According to Bloomberg, shareholders present at the meeting questioned whether Mazars was up to the task. The news agency quotes head of European relations at VEB, the Dutch firm leading a class action suit against Steinhoff, as expressing surprise at the decision and asking why this particular firm was selected. VEB joined a group including former CEO Markus Jooste and defrauded Tekkie Town founder Braam van Huyssteen in calling for Steinhoff to release the full version of the PWC forensic report into financial irregularities at the company. Steinhoff’s executives say the report cannot be released because it would prejudice its case in ongoing legal action against the company and Steinhoff’s claims against former managers including Jooste.