18 years for man who defrauded Accéntuate of R70m

Cape Town – Former financial director of FloorworX Africa Louis Schreuder was this week given an 18-year sentence in the East London regional court after he was found guilty on 779 counts of fraud to the value of R70m.

FloorworX Africa’s holding company, JSE-listed Accéntuate [JSE:ACE] said it is pleased with the sentence after it discovered the fraud in December 2015 amid an internal audit.

The CEO of the flooring, water and chemicals specialist, Fred Platt, said he is pleased with the sentence handed down.

It “means that as a management team, we are able to put this matter behind us, knowing that we ensured that the perpetrator is accordingly punished and furthermore that a precedent is set for future sentencing of people who commit atrocities such as this”.  

The audit detected that a series of false suppliers were created and money siphoned through these payments to Schreuder’s personal bank account.

The Asset Forfeiture Unit has applied for an order to confiscate Schreuder’s assets, a process which is still ongoing.

“We think we may be able to recover a substantial amount, but not all of it,” Engineering News quoted Platt saying on September 27, when he presented the company’s financial results.

Platt told Engineering News that the fraud “occurred in systematic fashion over a ten-year period, ever since Accéntuate took over the East London operation”.

He said Schreuder was as a professional criminal “who built the hole when the accounting system was put up. He stole at a consistent pace so no one would notice.”

Fraud had negative impact on business

Accéntuate chairperson Ralph Patmore, writing in the 2016 annual report, said the “shock of the discovery of the substantial fraud, reported on at half year, had a negative impact on the business from both operational and executive time perspectives”.

“This effect cannot be measured but it takes the executives’ eyes off the business in that they are sucked into investigations and data collection for the pending trial, as well as soul searching trying to establish in their minds ‘how could this have happened on our watch’.

“As a board we are satisfied that it was the perfect storm in that the controls were in place, but the event that allowed the fraud to happen was introduced and expertly managed 10 years ago.

“The positive that can be derived is that the independent internal audit function, in line with good corporate governance, has proved its worth. They uncovered the fraud and this substantiates the value of the function as promulgated by King III.”

The fraud had a major impact on the company’s accounts and it had to restate previous financial results.

“Further investigations of the fraud have revealed that certain items accumulating to R17.6m at 30 June 2015, R6.6m arising in 2015 and R11.4m arising in 2014 and prior years, which should have been charged to cost of sales had been misrepresented and were accounted for in other receivables in order to account for the funds misappropriated,” the company said in its annual report.