08 Dec 2017

#Steinhoff: How economists reacted on Twitter

Cape Town – Twitter has been abuzz since news broke on Tuesday evening that Steinhoff International's CEO Markus Jooste had immediately resigned.

The global retailer's supervisory board also announced that PwC would be carrying out an internal investigation into the firm's books, after "accounting irregularities requiring further investigation" came to light.

The double whammy spooked investors and sent the firm's share price into a steep fall.

It has lost over 80% of its market capitalisation since the announcement, wiping tens of billions of rands off the JSE.

Here is how SA economists and business people reacted on social media.

Iraj Abedian, economist and CEO of Pan-African Investment and research service has likened Jooste’s actions to those of suspended Eskom chief financial officer, Anoj Singh and the recent KPMG saga.

Markus Jooste,another CA who has joined a long list of CAs such as Eskom's Anoj Singh&KPMG's crowd who have disgraced themselves&the profession,none of them have been called to account,pay for their unethical conduct,forced to pay back the money and spend a few years behind bars.
— Iraj Abedian (@IrajAbedian) December 7, 2017

Former First National Bank CEO and venture capitalist Michael Jordaan said he was encouraged that some investment algorithms managed to avoid Steninhoff.

Encouraged that the >1000 investment algorithms used by @NMRQL (Numerical) avoided Steinhoff
— Michael Jordaan (@MichaelJordaan) December 6, 2017

Wayne McCurrie of Ashburton Investments said he's seen plenty of corporate disasters over 30 years, but he's never seen such a massive reaction in a huge firm company so quickly.

I have seen plenty of corporate disasters over 30yrs but never such a massive reaction in a mega cap company so quickly. There must be debt somewhere secured by Steinhoff shares
— Wayne McCurrie (@WayneMcCurrie) December 6, 201

Trudi Makhaya, an economist, entrepreneur and writer according to her Twitter profile said she tried to understand Steinhoff for the past two years, but ended up feeling like a 'domkop'.

Steinhoff scandal goes global as the London Financial Times today runs four stories on SA’s biggest ever corporate disaster. Its comment: “The border between accounting scandal and fraud is marked by the bars of a jail.”
A post shared by Alec Hogg (@alechogg) on Dec 7, 2017 at 11:04pm PST

About 2 years ago, I felt like such as 'domkop' trying to understand Steinhoff financials...meanwhile...
— Trudi Makhaya (@trudimakhaya) December 7, 2017

Add your voice and vote on our Twitter poll here:

The #Steinhoff scandal is:
— Fin24 (@Fin24) December 8, 2017

Sygnia CEO Magda Wierzycka, meanwhile, likened the Steinhoff matter to the Guptas.

Steinhoff group and off-balance sheet vehicles are starting to look like a Gupta-empire. I have no sympathy for people who externalized their SA wealth through a sleight of hand listing in Frankfurt. But why risk exposure in a heavily regulated market? Greed over reason perhaps?

— Magda Wierzycka (@Magda_Wierzycka) December 6, 2017

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