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Steinhoff AGM rides out the storm – popular antipathy unabated

CAPE TOWN — Steinhoff made a material overstatement of its income and asset values over a number of years (PwC’s preliminary findings), but the loud protestors on Cape Town’s streets outside its local AGM last Friday didn’t feel they were overstating things. Barred to all but shareholders two stories above the placards, chants and hooting in support of the various affected unions, the AGM went neatly to plan, all the Steinhoff-proposed resolutions being passed, keeping board members firmly entrenched. This colourful description juxtaposing opposite and similar sentiment between shareholders and civil society protestors serves only to emphasise the ‘batten down the hatches” approach of the embattled former giant. It’s promised to fire only when the evidence matches the accusations, putting it in a similar boat to the Gupta’s and their Zuma’s, the major difference being that nobody has yet been charged. For the protestors – and who can easily differ with them? – State Capture and Corporate fiddling float together in a sea of corruption that South Africa cannot wait to be rid of. Story courtesy of the Daily Maverick. – Chris Bateman

By Adam Yates

On Friday morning, the impassioned singing of students echoed down the streets outside the Cape Town International Convention Centre.

Armed with T-shirts, protest signs, and a hatred for institutional corruption, the Congress of South African Students (Cosas) alongside representatives from the Federation of Union South Africa (Fedusa) and the Public Servants Association of South Africa (PSA), protested against Steinhoff International Holdings during the company’s Annual General Meeting.

From left to right, Philip Dieperink, acting chief financial officer of Steinhoff International Holdings NV, Danie van der Merwe, acting chief executive officer of Steinhoff International Holdings NV, Heather Sonn, chairman of Steinhoff International Holdings NV, and Steve Booysen, head of the audit committee of Steinhoff International Holdings NV, sit during the company’s annual general meeting in Amsterdam, Netherlands, on Friday, April 20, 2018. When Steinhoff held its annual general meeting a year ago, the company had a market value of about 20 billion euros ($25 billion). Now its less than 1 billion euros. Photographer: Jasper Juinen/Bloomberg

The AGM was intended to give shareholders a platform to voice their concerns, provide transparency and insight into a criminal investigation that is under way, and allow shareholders to vote on a multitude of resolutions pertaining to the appointment of board members and the next steps forward in Steinhoff’s recovery.

The picketers demanded accountability. They wanted to see a total overhaul of board leadership in Steinhoff following the December discovery of “financial irregularities that resulted in a 95% Steinhoff drop in the stock market.

As the sun beat down, and the songs swelled, Cosas members started a dance circle, raising their voices to declare, “Steinhoff we are coming for you.”

The protesters’ enthusiasm was palpable to all who passed by the traffic circle where the picket took place. Pedestrians inquired what they were protesting about (often, when told “Steinhoff,” the pedestrian gave a nod and a smile), and drivers speeding along hooted in agreement.

Read also: Steinhoff lays out salmon wraps, begs investors to help save ‘burning building’

Explaining why he was on the street protesting, Michael Mayalo, chairperson of the Western Cape Province Congress of Cosas, said:

As a learner, you [are] first a member of society before you are a member of any institution or high school. Therefore you are directly affected when [y]our parents’ money is looted.”

Mayalo points out that many of the protesters’ parents are working minimum wage jobs, and Steinhoff’s large-scale abuse of funds markedly impacts poor black families.

Chiming in, Cosas Cape Town Regional Secretary, Ziphelele Mpotli, said:

What motivated us the most is that we need to support our parents … And we won’t rest until [Steinhoff] pays back the money that he looted. We won’t rest.”

Read also: Johan van Zyl quits Steinhoff board just 2 days before AGM

For the protesters shouting out “Steinhoff”, the name is more than just that of the company’s founder, Bruno Steinhoff. Steinhoff is everything that is wrong with South African corruption. Steinhoff is racial inequality. Steinhoff is a foreigner taking advantage of poor communities. Steinhoff is greedy and inconsiderate. Steinhoff is unethical.

That money is meant for our teachers,” said Cosas member Masibongwe Sihlahla.

It is meant for our parents. So the fact that he thinks he can get away with looting the money of… our parents is not gonna happen… Every looter that is linked to Steinhoff must take accountability for the money that is lost.”

Read also: Markus Jooste is yesterday’s hero in Stellenbosch – Steinhoff name obliterated

The students never mention the now-resigned Steinhoff CEO, Markus Jooste, by name. Jooste would be a reasonable target of their frustration. However, the conglomeration of all the responsible parties into a singular “Steinhoff” helps simplify the issue. Their anger is directed at one man, and therefore accountability and justice can be served easily.

Inside the Steinhoff AGM, justice was slightly more complicated.

The cheers, dancing, the hooting cars, anger, fiery protest, were all absent on the second floor of the Convention Centre. But the frustration was still there, the sense of having been cheated and wronged was present as well.

Shareholders and Steinhoff “guests” stood outside the conference room, eating finger sandwiches and drinking coffee, but their disgust for what transpired in December manifested through quiet whispers and heated anticipation of what might unfold during the AGM.

Soon the doors opened and the South African Steinhoff coalition took their seats. A teleconference stream to Amsterdam, where the meeting was actually held, began. Steinhoff, the company, now had the opportunity to present its defence.

We understand and share the anger this has created,” opened Heather Sonn, the Steinhoff board member who chaired the AGM.

Despite the fact that Steinhoff is “severely constrained around ability to communicate due to legal advice” Sonn assured the audience that “good progress is being made” relative to the PwC investigation into Steinhoff.

After further introductory remarks, including a metaphor of comparing the Steinhoff collapse to “finding yourself in a burning building”, Sonn passed the microphone to other members of the Steinhoff board. Speakers gave updates on the organisation’s financial standing and restructuring plan, and provided (quite limited) information regarding the investigation into Steinhoff’s irregularities.

Steinhoff Stable. More of Zapiro’s brilliant work available at www.zapiro.com.

For the rest of the four-and-a-half hours a back-and-forth between frustrated shareholders and the Steinhoff board unfolded. Questions were fielded, mainly from the Amsterdam crowd. South Africans were given the opportunity to posit inquiries directly to the board but few accepted the offer.

The questions were rife with sarcasm, passive aggression, anger, and disappointment. Shareholders had put their trust, and more importantly their money, into an organisation that abused its power and responsibility. The shareholders at the meeting at least had the opportunity to voice their concerns. They had a seat at the table that those three storeys below were never given.

Steinhoff refused the Fedusa representatives leading the protest access to the meeting, claiming they were not direct shareholders.

Fedusa’s protest aimed to give voice to the voiceless – the Fedusa members who are direct shareholders but couldn’t afford the day off from work to attend the meeting themselves.

You don’t want thousands of people to stay out of work and lose a day’s salary but you try to mobilise society,” explained Fedusa’s General Secretary, Dennis George.

Tahir Maepa, the Deputy General Manager of PSA, shared his thoughts on how Steinhoff can regain trust. Maepa believes that all who are involved should be replaced.

It would be very irresponsible of the shareholders to allow the same guys to come back to serve in any board. No way these guys will turn around this institution, they are the ones that caused the collapse,” he said.

Central to this demand was the need to reject Steve Booysen’s appointment to the supervisory board. Booysen served as audit committee chairman during the scandal and Fedusa sees him as a responsible party for the massive financial damage suffered by Steinhoff shareholders. Booysen’s appointment was approved narrowly. He received 56.8% of the shareholders’ support, while 43.13% voted against his appointment.

We want people to go to jail, we want people to lose their properties in order to make sure that we send a clear message to other corporates that this kind of behaviour – maladministration, bad corporate culture, unethical conduct – is never allowed to ever surface in this country ever again,” proclaimed Maepa on the street.

From behind a table in Amsterdam, Sonn assured those at the AGM that should any of the newly appointed or re-appointed board members be found responsible for the financial irregularities, in any way, during the PwC investigation of Steinhoff, they will resign immediately.

An honourable promise, perhaps, but probably insufficient for those who want a clear statement to be made. As one of the shareholders remarked to the board, “the jury is still out on if any of the nominees are a part of the problem or the solution”.

At the end of the day, the voices of the protesters, both outside and inside, did not make a difference. Every resolution proposed by Steinhoff, including each appointee for both the supervisory and advisory boards, passed. Most of the resolutions were passed with a significant majority of the shareholder votes, generally ranging from 80% to as high as 99% approval for the resolutions.

The headquarters of Steinhoff International Holdings NV stand in Stellenbosch, South Africa. Photographer: Waldo Swiegers/Bloomberg

A question about the lack of diversity in board leadership (nearly every single appointee was a white male), and a legal technicality argument made to discredit the AGM, brought the meeting to a dramatic end. But no dramatic change was made. And now, only time will tell if, and to what extent, justice will be served for the responsible parties in Steinhoff’s collapse.

For the protesters, and especially the Cosas members outside, the events that transpired in the meeting do not necessarily take away from the civic engagement displayed by picketing.

George hoped the learners that came to protest would understand the necessity for good governance and ethical leadership, values he thinks have been absent in South Africa both politically and in the private sector for quite some time. When those values are ignored, George believes, one must take responsibility into their own hands.

For Mayalo at least, this lesson was learned.

Our role is clear. We are the ones that are going to initiate South Africa and we are refusing to initiate a bankrupt South Africa, we are refusing to initiate a corrupt state, we are refusing to initiate a captured state that does not think about values of poor people.”

When the energy began to die down at the rally and students started sitting and signs transformed from declarations of protest into shields from the sun, Mayalo, Mpotli, and Sihlahla still retained a sense of optimism.

Mayalo contemplated a day in which protests would no longer be needed.

So, I might be the next president of the country, I will never want to initiate a country that is corrupt,” he reasoned.

So that is why now we must fight corruption… We are the future.” DM

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