Steinhoff CEO’s R26.4m loan one week before stock collapsed | Fin24
 
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Steinhoff CEO’s R26.4m loan one week before stock collapsed

May 06 2018 06:03

Steinhoff International Holdings said acting CEO Danie van der Merwe repaid a R26.4 million loan backed by company shares that he took out a week before the retailer’s stock collapsed because of an accounting scandal.

The timing of the loan raises questions about how much Van der Merwe knew about the financial malpractice that has brought the company to the brink of collapse.

Acting chairwoman Heather Sonn told investors last month that any current executive would quit if they were implicated in wrongdoing. Steinhoff is the subject of legal claims, including a R59 billion lawsuit by former biggest shareholder Christo Wiese, who also served as chairman of the company.

Van der Merwe’s personal investment company, Ruby Street Investments, borrowed the funds from Investec plc on November 29, the same day that companies owned by former chief executive Markus Jooste and his son-in-law, Stefan Potgieter, took out a R93 million loan from the same bank, according to a court filing by Investec in December. Both loans were backed by Steinhoff stock and were arranged by Potgieter.

Steinhoff reported accounting irregularities on December 5, causing the shares to crash more than 80% in three days. Jooste quit immediately, and has been referred by the company to an anti-corruption police unit. He hasn’t commented publicly since. Van der Merwe was Steinhoff’s chief operating officer at the time, and was made acting chief executive on December 19.

Van der Merwe was sued alongside Jooste and Potgieter by Investec days after the Steinhoff share collapse. The bank said when the loans were agreed, all three must have been aware of accounting concerns that led to the plunge in the share price and didn’t inform the lender, according to the court filing. The clerk of the High Court in Cape Town said she wasn’t aware of formal responses filed in the lawsuit. – Bloomberg

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