SA authority fines Steinhoff a record R1.5bn - but it only needs to pay R53m | Fin24
 
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SA authority fines Steinhoff a record R1.5bn - but it only needs to pay R53m

Sep 12 2019 12:18

The Financial Sector Conduct Authority (FSCA) has fined Steinhoff an administrative penalty of R1.5bn.

"The requirement for Steinhoff to make multiple, significant restatements of its accounts subsequent to December 2017 supports the conclusion that Steinhoff failed to meet its obligations under the FMA 2012. The FSCA has therefore found that the Steinhoff Group made false, misleading or deceptive statements, promises or forecasts in its public statements to the markets in the prior period," the regulator said in a statement.

Given the scale and severity of the offence, it has issued a fine of R1.5bn.

But given Steinhoff’s current financial position, it will waive the bulk of it to only levy a penalty of R53m.

This is to avoid penalising innocent Steinhoff shareholders further, and due to the fact that the fraud was committed by former execs and staff.

It is also "in acknowledgement of the co-operation of management to date and Steinhoff’s commitment to continue co-operating fully with the FSCA in all future actions taken against any persons allegedly responsible for the wrongdoing."

"While, in light of Steinhoff’s current financial position, we have made the decision to remit a substantial proportion of the penalty, even after this reduction it remains the largest single fine ever imposed by the FSCA. We would like to thank the current Steinhoff management team for their co-operation and constructive engagement through this difficult and complex process," FSCA said.

Steinhoff's share price dropped 1c to 105c - its lowest level in three weeks. The company has lost 99% of its market value over the past two years amid revelations of fraudulent accounting, which amounted to more than R250bn. 

Last month, the share slumped to below 90c at one point, as investors continue to fret over whether the company can survive the massive legal claims against it. 

steinhoff  |  fsca  |  accounting fraud
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