Cape Town - The Public Servants Association (PSA) said on Friday that former Steinhoff CEO Markus Jooste “repeatedly lied to investors, the SA Revenue Service and regulators in South Africa and internationally” based on internal Steinhoff documents the union has been reviewing.
The PSA was given a trove of documents last week at Steinhoff’s Stellenbosch headquarters, including minutes of board meetings and financial documents dating back to 2002.
In a statement on Friday which expanded on what the union had said at a briefing on Thursday, the PSA said its preliminary investigation of the documents showed that Jooste had provided assurances in his director’s report about the sound financial health and ethical business practices at Steinhoff.
PSA and Fedusa union leaders with boxes of Steinhoff documents dating back to 2002. (Photo: Lameez Omarjee, Fin24)
Steinhoff’s share price has dropped by over 80% since news broke that Jooste was abruptly stepping down amid an accounting scandal on December 5, wiping billions off its market capitalisation.
On Friday, Steinhoff shares were changing hands at R7.22 at 12:00 on the JSE, down 3% on the day.
On Thursday, PSA deputy general manager Tahir Maepa said state workers, through state pension fund investments, had lost about R17bn due to the fall in the share price.
Steinhoff is currently facing at least seven different investigations in South Africa and Europe, and is the focus of at least two proposed class action suits in Germany and the Netherlands.
Four people associated with the group are also the focus of a German criminal tax investigation. The public prosecutor's office of Oldenburg in Germany told Fin24 earlier in January that its investigation is still ongoing, and that it could not say when it would be completed.
‘Collapse’ of corporate governance
The PSA said that based on the documents under review, corporate governance appeared to have “collapsed” at Steinhoff.
“A review of the associations and networks between the directors who have been on both the management and supervisory boards at Steinhoff, revealed that independent and sound decision making could be significant(ly) impacted by familiarities, friendships and associations,” it said.
PSA general manager Ivan Fredericks said the union wants the global retailer investigated for “knowingly making false statements in annual reports that were relied upon for making significant, and sovereign from the South African government perspective, investment decisions”.
“The PSA’s review of the information indicates that there could not have been sufficient balance of power on the board, and decision making could have been skewed to the benefit of a few powerful individuals on the board who also held significant shareholdings in the company,” he said.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER