South African Police to Hire Auditor to Help Steinhoff Probe
South African Police to Hire Outside Auditor for Steinhoff Probe
(Bloomberg) -- South African anti-corruption police are stepping up their investigation into alleged financial wrongdoing that caused the near collapse of Steinhoff International Holdings NV with the appointment of external forensic auditors and analysts.
An elite law-enforcement division, known as the Hawks, assigned more people to a probe of the retailer after starting a fast-track process last month, spokesman Brigadier Hangwani Mulaudzi said by phone on Thursday. The National Treasury will need to approve the appointment of an auditor.
The Steinhoff probe is “moving very swiftly now,” he said. The Hawks have been chastised by the chairman of parliament’s oversight committee on finance for taking so long to investigate the matter.
While Steinhoff first reported problems with its accounts in December 2017, the Hawks were only able to make serious headway with their investigations after being given full access to a PwC forensic report into the company in late March, Mulaudzi said. Steinhoff has referred former Chief Executive Officer Markus Jooste to the unit, but he hasn’t been charged with any offence.
PwC uncovered 6.5 billion euros ($7.3 billion) of irregular transactions between Steinhoff and eight firms between 2009 and 2017. The deals, orchestrated over several years, enabled the owner of chains from the U.S. to Australia to artificially boost profits and asset values, the report found. Since releasing a 10-page summary earlier in March, the company has limited access to the more than 3,000-page document. Even the Hawks can only see it at Steinhoff offices.
Steinhoff shares have crashed 97% since the accounting crisis erupted, and the company is the subject of several legal claims.
To contact the reporters on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net;Amogelang Mbatha in Johannesburg at ambatha@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Bowker, John Lauerman
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