Steinhoff: follow-up meeting

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Finance Standing Committee

28 March 2018
Chairperson: Mr Y Carrim (ANC), Ms J Fubbs (ANC), Mr T Godi (APC)
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Meeting Summary

https://www.youtube.com/watch?v=2Ye4XmL6Bu4

The Standing Committee on Finance; the Standing Committee on Public Accounts; the Portfolio Committee on Public Administration and the Portfolio Committee on Trade and Industry held a second briefing on the Steinhoff matter. Steinhoff legal representatives from Werkmans Attorneys; PricewaterhouseCoopers; the Companies and Intellectual Property Commission (CIPC); the Johannesburg Stock Exchange (JSE); the Financial Services Board (FSB); the Independent Regulatory Board for Auditors (IRBA); and the Directorate for Priority Crime Investigation (Hawks) were in attendance and gave feedback.

Steinhoff’s legal representation said the company wished it to be known that it was unusual to send forensic auditors and its attorney to Parliament- it would prefer to speak for itself. However, Steinhoff executives could not attend as they were attending a conference of the global group in the UK where the future structure and strategy of the company was being determined. The management board members acting in an interim capacity also felt they had limited rights to represent Steinhoff shareholders and had no clear mandate to do so until the group’s annual general meeting (AGM) on April 20. They would hopefully be able to appear at a further parliamentary hearing on Steinhoff. Steinhoff would like to place on record that since the announcement of accounting irregularities considerable progress had been made.

PricewaterhouseCoopers gave an update on the investigations. It was explained that 14 different work streams into the allegations of accounting irregularities had been developed. Monthly reports were being provided by each work stream to the supervisory board; weekly feedback is given to the group’s audit committee; two meetings a week are held with executive management on operational issues; and regular contact was maintained with the external auditor Deloitte. They were working in parallel with each other to expedite the probe and would each submit their individual reports when their work was completed, rather than waiting for one final report of all work-stream findings to be compiled. Also, four special high-level reviews had been completed into 39 entities to determine which of Steinhoff’s operational units were not affected by the allegations. PwC was currently involved in a further 18 reviews involving 150 entities and had another six planned. This work would assist the auditors in finalising their statutory audits. The PwC team was trying to complete its investigation as soon as possible, and no limitations had been placed by Steinhoff management on the scope of the investigation.

CIPC gave an update on progress of Steinhoff investigations. The Commission had issued a compliance notice against the Group in January 2018 under section 214 of the Companies Act, citing falsification of accounting records. The Steinhoff board had been given six months to provide the Commission with the names of individuals who were involved in this falsification and to institute criminal action against them. The Commission wanted to see action taken to recover money and to apply for directors to be declared delinquent. The directive made it clear that within six months from the date of the Notice, the Steinhoff Board: must identify individuals that were involved in the falsification of any accounting records of Steinhoff and/or any related or interrelated business unit(s), division(s), associate companies, joint venture companies and/or subsidiaries of Steinhoff; must institute criminal action, by opening criminal cases, irrespective of geographic location, against those individuals; must institute civil action as per section 77 and section 162(2) read with section 162 (5) (a) to (c) of the Act in the Republic of South Africa and the equivalent of this action in other jurisdictions where Steinhoff and/or any related or interrelated business units, divisions, and/or subsidiaries of Steinhoff operates, against those individuals involved in the falsification of the accounting records; must provide monthly reports to the CIPC on the progress and implementation of the above; and publish on the Johannesburg Stock Exchange News Service (“JSE SENS”) the contents of this Compliance Notice within 24 hours of receipt.

The JSE presented how it was handling the Steinhoff matter. The JSE suspended Steinhoff's bonds and preferential shares on March 1 following the retail group's failure to publish its financial reports. The JSE was waiting on the PwC's findings to determine if the financial statements need to be restated. Therefore, the timing to take action would be determined by what may transpire from the PwC report. The JSE was also still working with the Frankfurt Stock Exchange, where Steinhoff has its primary listing. It was also looking into regulatory improvements as the Steinhoff matter had brought questions about the regulatory scheme and refinements in governance which should be made. Among the issues include the diversity of boards, board appointments and the authority of shareholders in appointing board members and the role of the boards. In addition, the JSE was working in close collaboration with other regulators, and continued to monitor trading activity as part of its routine surveillance.

The FSB explained that four investigations were currently underway. Two related specifically to insider trading. One looked into a foreign account which traded prior to a publication in August 2017. The second investigation focused on numerous trading accounts which sold Steinhoff shares between September 2017 and December 2017. The FSB was determining if the accounts are linked to Steinhoff, its executives or other parties related to Steinhoff. The third investigation was looking into misstatements of accounts for the 2015/16 financial results and the 2017 interim results, and the FSB was waiting for Steinhoff to restate the 2015/16 financial statements and the 2017 interim misstatements. The FSB was also looking into who was responsible for the misstatements and was collecting information from foreign regulators in this regard. Pursuant to this, Steinhoff executives had been interrogated and summonses had been issued to some executives, including Mr Jooste. The final investigation involved insider trading and false statements. This related to a report published on December 7, after Steinhoff issued a SENS on its accounting irregularities and followed the resignation of Mr Jooste. The report was published by a foreign research company, which may have taken short positions on Steinhoff shares. The investigations should lead to an outcome which would be presented to members of the directorate of market abuse. It would then be decided whether to close the matter or refer it for enforcement action, which would take the form of administrative sanction or criminal processes.

IRBA gave an update on its investigation. It was in the process of reviewing information it has received. It was pointed out that IRBA has approximately 150 open investigations and only five investigators; but the Steinhoff investigation had been prioritised as it is a public interest matter. As this was a complex investigation involving multiple entities and requiring cross-jurisdictional engagements within the various countries’ laws, it was not currently possible to reliably estimate the complete scope and therefore timeframes for completion. He added that an investigation outside of the public interest takes 18 months whereas one which is a matter of public interest could take longer. Notably, it could take up to three years to conclude a public interest investigation as complex as the Steinhoff one.

The Hawks told the Joint Committee that there were three Steinhoff matters being investigated. Two of the matters were raised in Stellenbosch and one in Sandton. He foresaw a whole flood of interested parties coming to the Hawks. The Hawks were also engaging with other role players and regulators such as the Companies and Intellectual Property Commission, the Financial Services Board, the Independent Regulatory Board for Auditors and the Reserve Bank, and were in the process of redrafting their investigation plan to incorporate the roles of the other organs. He explained that the Hawks will be looking into fraud at Steinhoff- everything that had been done relating to misrepresentation, which led to billions of rand in losses suffered by various bodies or individual parties. The Hawks were working through Interpol to engage with the law-enforcement agencies of Germany and Holland. They would also look at the foundation of the class action in the Netherlands as this would point to the wrongs that were committed. The National Prosecuting Authority (NPA) had also assigned three prosecutors to work with the Hawks on the cases. In the coming weeks, the Hawks would redraft its investigation plan, which would provide some idea of its timeline. The Hawks pointed out that Parliament may be under the false impression that Steinhoff reported a case to the Hawks. To make it utterly clear, Steinhoff did not report a case to Hawks. Steinhoff only submitted an ‘empty’ section 34 report which said nothing and does not pin point anyone. This was malicious compliance at the utmost. In the interim, the Hawks were in a process of getting a detailed response from Steinhoff, as it would be important to have the information to guarantee a decent investigation into the matter. Also, Steinhoff had referred the Hawks to PwC’s final report, which was yet to be completed. There were concerns that there was no certainty as to when the Hawks would get the PwC report.

Some Members expressed concern about former Steinhoff CEO Mr Markus Jooste’s non-attendance. It could certainly not be that individuals snub Parliament. He suggested he be subpoenaed to appear before Joint Committee. They pointed out the great deal of controversy around executive bonuses and allowances which might be given a go-ahead during the annual general meeting. It seemed obscene that people were being paid additional rewards for a mess which happened under their watch. They failed to understand how the bonuses could not be halted until after the company’s AGM on April 20. Although Steinhoff was an international company, there was nothing in South African investments laws which gave it carte blanche to do as it pleased. Furthermore, the Steinhoff collapse was a case of criminal fraud, not of a business strategy gone wrong. It was unacceptable that irregularities could have gone for so long without any recourse. What was the position of auditors who had been signing off their books for so long without identifying any issues? 

The Co-Chairperson appreciated the feedback and re-emphasised that the Joint Committee was not intending on supplanting the role of any regulatory or other investigative body, including the Hawks, and would never do that. The Joint Committee also did not want to pre-empt the outcomes of the investigations by these bodies, and further recognised that investigations into Steinhoff matter are complex, difficult and elusive, and take considerable time to complete. Although there has been some progress by the regulatory bodies in their investigations of the Steinhoff matter since the Joint Committee’s first meeting in January, the committees feel more should – and could be done – expeditiously, especially by the Financial Services Board (FSB). Further, the Joint Committee would propose to anybody linked to Steinhoff, who had been reluctant to appear before them, that their lawyers consult with Parliament’s lawyers on the legal parameters of the committees’ oversight role. The Joint Committee would also issue a statement to the effect that it had decided to give Mr Ben le Grange, together with Mr Jooste, a further 10 days to decide whether they will appear before the Joint Committee at its next Steinhoff briefing in August. The two would be subpoenaed if they decided not to appear or fail to reply to the request.

The Joint Committees will have the next briefing on Steinhoff in August, by which time the Companies and Intellectual Property Commission’s (CIPC’s) six-month compliance notice to Steinhoff will have lapsed and the Steinhoff commissioned investigation by PricewaterhouseCoopers (PWC) will have made some headway. Members expect to see far more progress and concrete feedback by then.

Meeting report

Opening remarks
Mr Carrim welcomed everyone and indicated this was the second briefing on the Steinhoff matter. He said the Joint Committee wanted to know about progress on the ongoing investigations. Most of the regulators had explained that they needed more time to provide fuller and more useful report backs, and all of them stressed that they were very committed to reporting to Parliament. The Joint Committee would not want to pre-empt the outcomes but expected some assurances that things were moving.

Mr Godi said regulators present must take the briefing as an opportunity to clarify issues, dispel rumours, and give comfort that efforts were being exerted to address the Steinhoff matter. It was in the best interest of the country as a whole that it be resolved expeditiously.

Steinhoff legal representatives’ input
Mr Robert Driman, Attorney, Werkmans, said Steinhoff wished it to be known that it was unusual to send forensic auditors and its attorney to Parliament- it would prefer to speak for itself. Steinhoff executives could not attend as they were attending a conference of the global group in the UK where the future structure and strategy of the company was being determined. The management board members acting in an interim capacity also felt they had limited rights to represent Steinhoff shareholders and had no clear mandate to do so until the group’s annual general meeting (AGM) on April 20. They would hopefully be able to appear at a further parliamentary hearing on Steinhoff. He added that Steinhoff would like to place on record that since the announcement of accounting irregularities considerable progress had been made.

PricewaterhouseCoopers (PwC) input
Mr Louis Strydom, Forensic Services Leader, PwC Africa, spoke on the progress of the investigations. He explained that 14 different work streams into the allegations of accounting irregularities had been developed. Monthly reports were being provided by each work stream to the supervisory board; weekly feedback is given to the group’s audit committee; two meetings a week are held with executive management on operational issues; and regular contact was maintained with the external auditor Deloitte. They were working in parallel with each other to expedite the probe and would each submit their individual reports when their work was completed, rather than waiting for one final report of all work-stream findings to be compiled. Also, four special high-level reviews had been completed into 39 entities to determine which of Steinhoff’s operational units were not affected by the allegations. PwC was currently involved in a further 18 reviews involving 150 entities and had another six planned. This work would assist the auditors in finalising their statutory audits.

Mr Strydom explained that there were copious amounts of information, including emails, which the firm had to go through. 3.3 million documents had been accumulated and 333 000 hard documents from senior executives’ offices had been scanned and were being worked through. PwC had assembled a team of more than 60 people globally for the probe, with technical accounting, legal and IT specialists having been drawn into the investigation, which also involves seven full-time partner. The PwC team was trying to complete its investigation as soon as possible, and no limitations had been placed by Steinhoff management on the scope of the investigation.

Discussion
Ms T Tobias (ANC) commended the PwC input and said it was reassuring that there were no limitations to the scope of the investigations. She asked if PwC had previously handled similar cases in other jurisdictions.

Mr D Ross (DA) expressed concern about former Steinhoff CEO Mr Markus Jooste’s non-attendance. It could certainly not be that individuals snub Parliament. He suggested he be subpoenaed to appear before the Joint Committee. He asked PwC’s views on investigations running concurrently with its own in other jurisdictions. On conduct of registered auditors, will there be investigations into the restated statements by Deloitte?

Mr A Lees (DA) asked what role former CFO Mr Ben le Grange was playing in the formulation of Steinhoff Africa Retail’s (STAR) financial statements at the moment. He agreed the Joint Committee would have to look into summonsing Mr Jooste together with Mr le Grange. Also, there was a great deal of controversy around executive bonuses and allowances which might be given a go-ahead during the annual general meeting. He asked for confirmation on this. It seemed obscene that people were being paid additional rewards for a mess which happened under their watch.

Mr A Westhuizen (DA) asked if there was any form of obstruction from any of the Steinhoff’s structures or individuals. On Mr Jooste’s non-attendance, prosecuting authorities had to be engaged about whether he might be prejudiced by coming to Parliament, as this was one of the arguments he was putting forward. He also agreed that Parliament should consider summonsing Mr Jooste.

Ms Fubbs commented on the bonus pay-out allegations. She failed to understand how the bonuses could not be halted until after the company’s AGM on April 20. Although Steinhoff was an international company, there was nothing in South African investments laws which gave it carte blanche to do as it pleased.

Mr Godi asked if PwC had interacted with key role-players within Steinhoff as part of the investigations, adding to the copious paperwork identified.

Mr Carrim asked if there were timelines or a tentative date for the completion of the PwC investigations. On Mr Jooste’s non-attendance, his reasoning was a 'lame excuse'. His argument that he could not turn up because he was no longer with Steinhoff was unacceptable. In fact it was precisely Mr Jooste that has most to account for in the collapse of the Steinhoff shares and its implications for a wide range of people in the country and elsewhere in the world. However, it was possible that, if approached, the court would say that Mr Jooste’s right to a fair trial transcends Parliament’s right to summons a person to appear before it, for this reason the courts must weigh in to provide clarity. He asked for a mandate from Members on whether a subpoena should be pursued. Further, although the Joint Committee recognised that those serving on the Steinhoff Supervisory Board may not be guilty of any wrongdoing and are entitled to be paid for their services, given the huge losses suffered by such large numbers of people with the collapse of the company shares, he felt the bonuses were unseemly and bordered on being provocative. He called upon the Steinhoff shareholders to reconsider the proposed bonuses.

Mr Strydom said Mr Jooste was the only Steinhoff executive who had not been interviewed as part of PwC’s investigations. Mr Jooste was invited to an interview but attached conditions which were unacceptable. PwC had interviewed individuals in Germany, who have been the best sources of what happened at the retail group. Some of these individuals have been engaged with three to four times. PwC was likely to finish its audit into Steinhoff by the end of the year. He also expressed that as new information comes to light it changes the timeline of the investigations. He added that PwC was not told by executives or non-executive directors how to conduct the investigation, what to look into and what to ignore. That was positive as PwC could not do its work properly if there were any limitations to the scope of the investigation.

Mr Driman said it was up to shareholders to approve or reject proposed salaries/bonuses of the Supervisory Board and Executives to be appointed at an AGM on April 20. The decision to approve the proposals depended on the shareholders. He added that comprehensive responses would be forwarded to the Joint Committee in writing.

Companies and Intellectual Property Commission (CIPC) presentation
Mr Asogaren Chetty, Head: Governance, Surveillance and Enforcement, CIPC, said the Commission was concerned that external companies listed in South Africa but not registered in the country are not subject to some provisions of the Companies Act. The CIPC’s concern was that a publicly listed foreign company is defined by the Companies Act as an external company and it is technically allowed to contract out of certain civil and criminal provisions of the Act, including section 214 on the duties of directors. This meant that in terms of liability there were no consequences. The problem was not only apparent at Steinhoff, but also at other companies – particularly mining groups – that were allowed to list and did not comply, for example, with rehabilitation and social and ethical obligations.

On progress on Steinhoff investigations, the CIPC had issued a compliance notice against the Group in January 2018 under section 214 of the Companies Act, citing falsification of accounting records. The Steinhoff board had been given six months to provide the Commission with the names of individuals who were involved in this falsification and to institute criminal action against them. The Commission wanted to see action taken to recover money and to apply for directors to be declared delinquent. The directive made it clear that within six months from the date of the Notice, the Steinhoff Board: must identify individuals that were involved in the falsification of any accounting records of Steinhoff and/or any related or interrelated business unit(s), division(s), associate companies, joint venture companies and/or subsidiaries of Steinhoff; must institute criminal action, by opening criminal cases, irrespective of geographic location, against those individuals; must institute civil action as per section 77 and section 162(2) read with section 162 (5) (a) to (c) of the Act in the Republic of South Africa and the equivalent of this action in other jurisdictions where Steinhoff and/or any related or interrelated business units, divisions, and/or subsidiaries of Steinhoff operates, against those individuals involved in the falsification of the accounting records; must provide monthly reports to the CIPC on the progress and implementation of the above; and publish on the Johannesburg Stock Exchange News Service (“JSE SENS”) the contents of this Compliance Notice within 24 hours of receipt.

Mr Chetty said it was interesting that Steinhoff had laid criminal charges in line with the Prevention and Combating of Corrupt Activities Act and had not included the Companies Act which allows it to declare people delinquent directors. CIPC was of the view that there had been a falsification of accounting records in terms of the Companies Act and this predated the establishment of Steinhoff N.V. Therefore provisions of the Companies Act were applicable.

Discussion
Mr Westhuizen wanted to hear CIPC’s view on the personal liability of directors. He noted the cases of directors hiding behind the juristic person of companies was rife. How could it be ensured that directors have more skin in the game? They should not get away with wrongdoing.

Mr J Esterhuizen (IFP) said the Steinhoff collapse was a case of criminal fraud, not of a business strategy gone wrong. It was unacceptable that irregularities could have gone on for so long without any recourse. What was the position of auditors who had been signing off their books for so long without identifying any issues? 

Ms Fubbs said there was need for broader discussions on the existing legislations and the gaps, as identified, had to be addressed with amendments. 

Mr Chetty replied that in terms of the civil and criminal aspects of the Companies Act, there was room for a number of amendments. On the personal liability of directors, Section 77(3) of the Companies Act as well as a whole host of other clauses had such provision. However, there was need for much broader discussions on this. 

Johannesburg Stock Exchange presentation
Ms Nicky Newton-King, CEO, Johannesburg Stock Exchange, presented how the JSE was handling the Steinhoff matter. The JSE suspended Steinhoff's bonds and preferential shares on March 1 following the retail group's failure to publish its financial reports. The JSE was waiting on the PwC's findings to determine if the financial statements need to be restated. Therefore, the timing to take action would be determined by what may transpire from the PwC report. The JSE was also still working with the Frankfurt Stock Exchange, where Steinhoff has its primary listing.

Ms Newton-King explained that the JSE was looking into regulatory improvements. The Steinhoff matter had brought questions about the regulatory scheme and refinements in governance which should be made.
Among the issues include the diversity of boards, board appointments and the authority of shareholders in appointing board members and the role of the boards. She added that the JSE was working in close collaboration with other regulators, and continued to monitor trading activity as part of its routine surveillance.

Discussion
Mr Lees asked about the general picture of the trading of Steinhoff N.V ordinary shares post the December collapse.

Ms Newton-King said she did not have the exact statistics but activity in the shares was much less volatile and much lower than it was before, but its shares had fallen out of the main indices.

Mr Godi appreciated the JSE input. Its role was clearly delineated. He reiterated that regulators had to draw valuable lessons from the Steinhoff debacle and make sure it does not happen again.

Financial Services Board presentation
Mr Alex Pascoe, Investigation Team Leader: Directorate of Market Abuse, Financial Services Board (FSB), explained that four investigations were currently underway. Two related specifically to insider trading. One looked into a foreign account which traded prior to a publication in August 2017. The second investigation focused on numerous trading accounts which sold Steinhoff shares between September 2017 and December 2017. The FSB was determining if the accounts are linked to Steinhoff, its executives or other parties related to Steinhoff. The third investigation was looking into misstatements of accounts for the 2015/16 financial results and the 2017 interim results, and the FSB was waiting for Steinhoff to restate the 2015/16 financial statements and the 2017 interim misstatements. The FSB was also looking into who was responsible for the misstatements and was collecting information from foreign regulators in this regard. Pursuant to this, Steinhoff executives had been interrogated and summonses had been issued to some executives, including Mr Jooste. The final investigation involved insider trading and false statements. This related to a report published on December 7, after Steinhoff issued a SENS on its accounting irregularities and followed the resignation of Mr Jooste. The report was published by a foreign research company, which may have taken short positions on Steinhoff shares.

Mr Pascoe said the investigations should lead to an outcome which would be presented to members of the directorate of market abuse. They would then decide on whether to close the matter or refer it for enforcement action, which would take the form of administrative sanction or criminal processes.

Discussion
Mr Godi was underwhelmed by the FSB progress report. The Joint Committee would have wanted a deeper sense about what was being done, not general statements. 

Ms Tobias expressed her disappointment that the FSB seemed to not have broken any new ground in its investigations. The report was not different to what was presented at the first hearing on January 30. It appeared that there was hardly any progress.

Mr Carrim asked for further details and a tentative date for the completion of the investigation.

Mr Pascoe said FSB was guided by section 88 of the Financial Markets Act and thus could not shed more information, as this might jeopardise its investigations. The first investigation into insider trading could take three to four months, while the second would be completed by the end of the year.

Independent Regulatory Board for Auditors (IRBA) presentation
Mr Imran Vanker. Director: Standards, IRBA, gave an update on their investigation and highlighted that IRBA has not been sitting with its arms folded. IRBA launched its investigation in December 2017 after issuing a letter to Steinhoff’s audit firm Deloitte. Deloitte provided a detailed response on January 20, 2018 relating to three years of audits for the years between 2014 and 2016. The responses had been quite satisfactory and Deloitte was cooperating. IRBA then made a decision to extend the investigation by two more years dating to 2012. It was important to note that the IRBA still requires the restated financial statements once issued.

Mr Vanker said IRBA was in a process of reviewing information it has received. He pointed out that IRBA has approximately 150 open investigations and only five investigators; but the Steinhoff investigation had been prioritised as it is a public interest matter. As this was a complex investigation involving multiple entities and requiring cross-jurisdictional engagements within the various countries’ laws, it was not currently possible to reliably estimate the complete scope and therefore timeframes for completion. He added that an investigation outside of the public interest takes 18 months whereas one which is a matter of public interest could take longer. Notably, it could take up to three years to conclude a public interest investigation as complex as the Steinhoff one.

Discussion
Ms T Chiloane (ANC) expressed concern about IRBA’s capacity. Having only five investigators dealing with more than 150 cases as identified was a huge challenge.
 
Mr Vanker agreed that IRBA currently had capacity constraints and there was need for additional manpower. However, IRBA recently met with Treasury in order to secure additional funding to deal with the challenge. He added that Parliament’s support was appreciated.

Mr Carrim said IRBA’s role had become more important given what had been happening within the audit space. He urged the negotiations with Treasury to continue. The Committee would also put pressure on Treasury to facilitate additional funding to empower the IRBA further, if possible.

The Directorate for Priority Crime Investigation (Hawks) input
Major-General Alfred Khana, Head: Commercial Crime Unit, Hawks, told the Joint Committee that there were three Steinhoff matters being investigated. Two of the matters were raised in Stellenbosch and one in Sandton. He foresaw a whole flood of interested parties coming to the Hawks. The Hawks were also engaging with other role players and regulators such as the Companies and Intellectual Property Commission, the Financial Services Board, the Independent Regulatory Board for Auditors and the Reserve Bank, and were in the process of redrafting their investigation plan to incorporate the roles of the other organs. He explained that the Hawks will be looking into fraud at Steinhoff- everything that had been done relating to misrepresentation, which led to billions of rand in losses suffered by various bodies or individual parties. The Hawks were working through Interpol to engage with the law-enforcement agencies of Germany and Holland. They would also look at the foundation of the class action in the Netherlands as this would point to the wrongs that were committed. The National Prosecuting Authority (NPA) had also assigned three prosecutors to work with the Hawks on the cases. In the coming weeks, the Hawks would redraft its investigation plan, which would provide some idea of its timeline.

Major-General Khana pointed out that Parliament may be under the false impression that Steinhoff reported a case to the Hawks. To make it utterly clear, Steinhoff did not report a case to Hawks. Steinhoff only submitted an ‘empty’ section 34 report which said nothing and does not pin point anyone. He explained that the chairperson of Steinhoff’s audit and risk committee Mr Steve Booysen dropped a report without naming those implicated in wrongdoing. The report was dropped on the eve of Steinhoff’s first appearance before Parliament on January 31. When he saw the report, he was livid ‘because it was nothing’. This was malicious compliance at the utmost. He could not fathom the purpose of the report and he nearly negated it. In the interim, the Hawks were in a process of getting a detailed response from Mr Booysen, as it would be important to have the information to guarantee a decent investigation into the matter. Also, Steinhoff had referred the Hawks to PwC’s final report, which was yet to be completed. He raised concerns that there was no certainty as to when the Hawks would get the PwC report. Hawks were at the mercy of reports it was supposed to get.

Discussion
An ANC Member expressed concern that the Hawks was still in the process of redrafting an investigation plan and not implementing one. He asked why this was the case.

Major-General Khana said there had been an investigation plan prior to the aforesaid engagements with other agencies. Therefore, the plan was being amended to incorporate the agencies’ inputs.

Mr Carrim said perhaps Steinhoff only reported the matter just because they were appearing before the Joint Committee the next day. This was worrying and must be condemned. He added that while recognising the complexities of the case, Steinhoff was urged to fully cooperate with the Hawks and for the Hawks to process the case expeditiously.

Mr Driman said the report to the Hawks had not been cynical. He sought to stress there was no open-and-shut case to be handed over to the Hawks for prosecution and that the investigation was an evolving one. He indicated that Steinhoff wrote to Major-General Khana after it learned that he found the report submitted by Mr Booysen to be malicious. He expressed his willingness to engage with the Hawks on the matter.

Mr Carrim appreciated the feedback and re-emphasised that the Joint Committee was not intending on supplanting the role of any regulatory or other investigative body, including the Hawks, and would never do that. The Joint Committee also did not want to pre-empt the outcomes of the investigations by these bodies, and further recognised that investigations into Steinhoff matter are complex, difficult and elusive, and take considerable time to complete. Although there has been some progress by the regulatory bodies in their investigations of the Steinhoff matter since the Joint Committee’s first meeting in January, the committees feel more should – and could be done – expeditiously, especially by the Financial Services Board (FSB). Further, the Joint Committee would propose to anybody linked to Steinhoff, who had been reluctant to appear before them, that their lawyers consult with Parliament’s lawyers on the legal parameters of the committees’ oversight role. The Joint Committee would also issue a statement to the effect that it had decided to give Mr Ben le Grange, together with Mr Jooste, a further 10 days to decide whether they will appear before the Joint Committee at its next Steinhoff briefing in August. The two would be subpoenaed if they decided not to appear or fail to reply to the request.

The meeting was adjourned.

 

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