Business 7.12.2017 09:02 pm

Gigaba gravely concerned by Steinhoff’s impact on retirement funds

PRETORIA, SOUTH AFRICA – APRIL 04: Finance Minister Malusi Gigaba. (Photo by Gallo Images / Beeld / Felix Dlangamandla)

PRETORIA, SOUTH AFRICA – APRIL 04: Finance Minister Malusi Gigaba. (Photo by Gallo Images / Beeld / Felix Dlangamandla)

The minister supports the decision by the FSB to institute an independent investigation into possible false and misleading reports by the embattled company.

Finance Minister Malusi Gigaba on Thursday said he was gravely concerned by the developments of accounting irregularities at Steinhoff International Holdings in its recent financial statements.

Retail holding company Steinhoff’s chief executive, Markus Jooste, resigned in a haste on Wednesday as the company asked for an investigation into accounting irregularities and possible fraud.

Jooste had been at the helm for nearly 20 years and oversaw its expansion to one of the world’s largest household goods retailers.

The company, which recently became a star of the Johannesburg Stock Exchange (JSE) as it gobbled up various European retailers, is the subject of an investigation into accounting irregularities in Germany.

The announcement came as a shock to investors, sending the share price on a nosedive crashing more than 60 percent on the stock markets. This is said to have caused pensioners more than R10 billion rand in value.

Gigaba said as a listed company on the JSE with its primary listing on the Frankfurt Stock Exchange, investors rightly expect the highest degree of honesty and integrity in the financial statements and reports of companies such as Steinhoff, to protect investors from market abuse and manipulation.

In a statement, National Treasury said that Gigaba supports the decision by the Financial Services Board (FSB) to institute an independent investigation into possible false and misleading reports in terms of section 81 of the Financial Markets Act, as well as any related abuses by Steinhoff.

This is over and above an internal investigation by the JSE to probe the extent of the accounting irregularities at Steinhoff.

“The minister expects the JSE to report its findings to the FSB. South African legislation allows for appropriate action against any person who has not exercised his or her fiduciary responsibility to shareholders, some of whom are institutional and retirement funds,” Treasury said.

“The minister is mindful that many retirement and savings funds may be adversely affected by the loss in the value of Steinhoff shares; therefore, members of retirement funds should be reassured that current regulations limit the extent to which any one fund may be invested in any one company.”

Treasury said Gigaba has requested the retirement funds regulator at the FSB, Public Investment Corporation (PIC), and the Government Employees Pension Fund (GEPF) to provide him with a report on the extent of exposure for retirements funds.

“The Minister expects that this report will give assurance that the interests of the shareholder are protected, including retirement and savings funds,” Treasury said.

“Considering the recent call for corporate South Africa to provide accurate reporting of its financials, the Minister will also have discussions with other appropriate regulators, like the Independent Regulatory Board for Auditors (IRBA), to assess any likely lapses in financial and auditing reporting.”

Meanwhile, lobby groups like the Business Leadership South Africa and the Black Business Council have all condemned Steinhoff’s alleged “unethical and corrupt behaviour”.

 – African News Agency (ANA)

ALSO READ:

Five things you need to know about Steinhoff

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