Steinhoff Chairwoman Quits in Fresh Blow for Scandal-Hit Retailer
Steinhoff International Holdings NV Chairwoman Heather Sonn quit after it emerged that a firm she part owns was involved in a deal that may have been funded by the South African retailer.
Sonn was promoted from non-executive director in late 2017 after auditors at Deloitte LLP refused to sign off on Steinhoff’s accounts, triggering a share-price collapse and a series of revelations about financial irregularities. The 48-year-old has since help steer the company to a position of relative stability, though the stock remains more than 98% below pre-scandal levels.
Sonn part owns Gamiro Ventures Pty Ltd., a Cape Town-based investment firm, which completed a deal with another firm, Geros Financial Services Pty Ltd., that may have been associated with and indirectly funded by Steinhoff, the Frankfurt-listed retailer said in a statement on Monday.
Sonn had asked for the deal to be investigated as part of an extensive probe conducted by PwC into Steinhoff’s wrongdoing, the company said, but other priorities meant a conclusion has only been reached more than two years later. She declined to comment beyond the statement when contacted by Bloomberg News on Monday.
Sonn joined the Steinhoff board in December 2013, following in the footsteps of her father, Franklin Sonn, an anti-apartheid activist and former South African ambassador to the U.S., who served as a non-executive director at the company for more than a decade.
“She came in later, when the fraud was already underway and while there appears to have been a transgression here, it’s not core,” said Asief Mohamed, chief investment officer at Cape Town-based Aeon Investment Management. “I am surprised she stepped down over this, but respect her for the decision as something that she must see as the right thing to do.”
Steinhoff’s former chief executive officer, Markus Jooste, has been identified as central to the web of related-party transactions that were at the heart of the company’s scandal but hasn’t been charged with any crime. While many of his former colleagues, including Sonn, have faced investors, bankers and regulators in efforts to keep the global retailer afloat, the 59-year-old has made only one public appearance in an official capacity, facing questions in parliament in September 2018 about his role in the crisis.
A few months after taking over from then-billionaire Christo Wiese, Sonn said she accepted the role of chairwoman because she felt a duty to those affected by the crisis. She also said that great efforts had been made to keep things hidden, describing the scandal as “the worst thing that could have happened on our watch.”
Steinhoff was for many years run by a board of tight-knit people, many of whom had done business together for decades. Third-party deals are at the heart of the accounting crisis and Steinhoff’s 2017 annual report identified myriad transactions that the company said weren’t properly disclosed according to best corporate governance practice.
“It is important to note that Ms Sonn has in no way been found to have participated in the accounting irregularities at Steinhoff,” Deputy Chairman Peter Wakkie said in the statement. “Heather’s strong and calm leadership has been invaluable during the turbulent times that the group has faced.”
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