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Forensic report into Steinhoff shows top execs inflated profits for years

Mar 15 2019 18:25
Jan Cronje, Fin24

Steinhoff International [JSE:SNH] announced on Friday afternoon that a "small group" of former Steinhoff executives, in concert with executives at other companies, for years inflated the profit and asset values of the Steinhoff group.

This was included in an overview of a forensic probe into the company's financial statements conducted by PricewaterhouseCoopers Advisory Services.

The Stellenbosch-headquartered retailer made an 11-page overview of the probe public on Friday evening. 

"The PwC investigation found a pattern of communication which shows the senior management executive instructing a small number of other Steinhoff executives to execute those instructions, often with the assistance of a small number of persons not employed by the Steinhoff Group," it said.

It did not give the names of any of the people referred to in the report. 

According to the overview, to cover up their wrongdoing the executives backdated documents. 

"The transactions identified as being irregular are complex, involved many entities over a number of years and were supported by documents including legal documents and other professional opinions that, in many instances, were created after the fact and backdated."

PwC was hired to conduct an independent forensic probe into the multinational retailer in late 2017, following the abrupt resignation of its CEO Markus Jooste, after the company's auditors flagged accounting irregularities in its financial statements.

The group's share price plunged in the wake of Jooste's resignation, cutting its market capitalisation down by R200bn. 

The findings of the forensic report were twice delayed before being submitted to Steinhoff leadership earlier in the month. 

Read the report below:

steinhoff  |  pwc  |  markus jooste
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