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By Alec Hogg
For noisy activists, Steinhoff’s AGM on Friday was a damp squib. All the motions passed, specifically the contentious ones to re-appoint auditors Deloitte and a trio of long-serving directors. Rational stakeholders, however, will be relieved the complex process of unravelling Steinhoff’s chaotic accounts is still on track.
But even though most missed it, something dramatic did indeed emerge at Friday’s AGM. Half way through a 26-page Powerpoint presentation by management, we read that PwC’s forensic investigation has “confirmed a pattern of transactions undertaken over a number of years across a variety of asset classes that led to the material overstatement of income and asset values of the Group.”
In the ever cautious language of auditors, that’s a bombshell. In plain speak it means PWC has proof Steinhoff’s financial statements were cooked over many years through fictitious invoices (income statement) and by falsifying the value of what the company owns (balance sheet). This is criminal fraud. Which, in Steinhoff’s case, was perpetrated on an industrial scale.
The question now is when PWC intends handing this evidence to law enforcement agencies. After Friday’s disclosures, it can’t be long. Which means defrauded shareholders will soon see former CEO Markus Jooste and his co-conspirators behind bars. Small solace for the massive losses incurred. But some satisfaction, at least.