Staff Reporter.
The National Prosecuting Authority (NPA) said on Friday there was no conflict of interest in Steinhoff contributing millions of rand towards investigating fraud at the company.
Retailer Steinhoff said it has agreed to give investigators from the Hawks and National Prosecuting Authority (NPA) R30m to finance the investigation into the immense fraud at the company because the state doesn’t “have the budget”.
Steinhoff CFO Theodore de Klerk said the Hawks and NPA first approached the company to ask if PwC (which had already completed a forensic investigation for Steinhoff) could “assist” the state because it “hasn’t got the resources” to probe such a complex case.
An investigation carried out by PwC found the firm recorded fictitious or irregular transactions totalling €6.5-billion over a period covering the 2009 and 2017 financial years, according to a summary of the findings posted on the Steinhoff company website.
The investigators found that a small group of former Steinhoff executives and individuals from outside the company, led by an identified “senior management executive”, implemented the deals, which substantially inflated the group’s profit and asset values, the summary said.
NPA spokesperson Sipho Ngwema said the state had received “some generosity” from Steinhoff, “given that the forensic investigation was done by PwC who are the forensic investigators of Steinhoff and because the state, if they were to start from the beginning it meant that a lot of work had to be done spanning over five countries”.
He said the payment went straight to PwC and not to the state.
This is going to help so that the investigation does not take twice or thrice as much. We do not see any conflict of interest.”
Ngwema said if it later emerged that the company had to be added to the list of suspects, that process would follow.
Meanwhile three top Steinhoff executives have been formally charged in Germany with balance sheet fraud which allegedly took place in 2015.
The charges carry a maximum sentence of a three-year prison term.
If the tree are convicted, it would be the first time since the scandal broke that anyone from Steinhoff is brought to book.
The probe into Steinhoff’s financial misdealing is two-fold, with the other part being conducted by the South Africa’s crack investigation unit, the Hawks.