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Parliament's finance committee lashes out at Steinhoff

Dec 12 2017 16:17
Jan Cronje

Cape Town - Parliament’s oversight committee on finance on Tuesday said it was “outraged at what has happened at Steinhoff and utterly condemns the company’s behaviour”.

In a media release the committee’s chairperson Yunus Carrim (ANC) said the committee would call Steinhoff representatives, and other stakeholders, to appear before Parliament in late January 2018. 

On Monday Parliament’s Standing Committee on Public Accounts (Scopa) said it intended to call Steinhoff leadership before Parliament "early in the new year".

"South Africa’s reputation is in the gutter because of political and corporate corruption", Scopa said in a media release.
Carrim urged all bodies conducting investigations into the Stellenbosch-headquartered global furniture and household goods conglomerate to “expedite their investigations and release the outcomes to the public”.

Steinhoff shares plunged last week Wednesday following a company announcement that its CEO Markus Jooste was resigning "with immediate effect", and that PricewaterhouseCoopers had been retained to conduct an independent investigation into "accounting irregularities requiring further investigation".

Steinhoff, which is registered in the Netherlands, has not yet given an update on what the accounting irregularities entail. 

The stock, which was trading at just over R46 a share on Tuesday evening last week, plummeted to a low of R6 on Friday, wiping billions off Steinhoff’s market capitalisation. 

The Public Investment Corporation, which manages the assets of the state’s main employee pension fund, owns about 10% of Steinhoff’s stock.

As of Tuesday at 15:30, Steinhoff shares had recovered slightly to trade at R12.27. 

‘Tighter regulation’ 

Carrim said the dramatic share price fall “confirms the need for tighter regulation and monitoring of companies and for more effective regulatory bodies”. 

“We are concerned, not just about the financial losses suffered by the Public Investment Corporation the Government Employees’ Pension Fund and the government employees they represent, but also about the prospects of major job losses for workers in Steinhoff companies,” he said. 

The global retailer employs about 130 000 workers in 30 countries. Some of its major brands in SA include Ackermans, Pep, Tekkie Town, Russells, HiFi Corp and Incredible Connection. 

The DA's finance spokesperson David Maynier, a member of the committee, said on Monday the accounting irregularities at Steinhoff "may be one of the biggest corporate scandals in the history of South Africa".

Maynier urged the committee to hold public hearings into Steinhoff in late January 2018, and call witnesses including Christo Wiese, Markus Jooste and representatives of Steinhoff's auditors Deloitte.

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