Steinhoff: Ben la Grange’s sentence a missed opportunity for justice

The sentencing last week of Ben la Grange, the former chief financial officer (CFO) of Steinhoff, stands as a stark reflection of the troubling dynamics at play in the prosecution of white-collar crime in South Africa.

Following Markus Jooste’s suicide, La Grange is the most senior executive who was involved in the fraud.

Steinhoff’s kingpin number two’s plea deal leaves much to be desired in terms of justice.

His effective sentence of five years in prison for his involvement in the €6.5 billion (R100 billion in 2017) fraud raises profound concerns about the seriousness with which such crimes are addressed, given the catastrophic consequences for shareholders, pensioners, and South Africa’s reputation.

The 2017 collapse of Steinhoff’s share price wiped out a staggering R230 billion in market value. It was a monumental blow to investors, with many suffering irreversible financial losses.

As the CFO, La Grange was directly responsible for safeguarding the integrity of Steinhoff’s financial reporting. Instead, his role as the custodian of the company’s accounts became complicit in perpetuating the fraudulent practices that led to its downfall.

ALSO READ: Steinhoff Ex-CFO released on R150k bail months after CEO’s death

All parties, including La Grange, pleaded ignorance and laid the blame at the door of former Steinhoff CEO – Jooste.

However, after Jooste’s suicide in March this year, La Grange emerged as the highest-ranking executive left to face criminal proceedings.

La Grange was Steinhoff’s financial chief.

In all companies, the CFO is seen as the second in command after the CEO, and their job is to know what’s going on in the company’s finances.

The 7 000-page forensic report by PwC into the accounting irregularities at Steinhoff implicated the entire executive team, including La Grange.

ALSO READ: Former Steinhoff CFO Ben la Grange gets five years jail time after guilty plea for fraud

NPA leniency

Given his pivotal role, it is strange that the National Prosecuting Authority (NPA) accepted his guilty plea on just one count of fraud and agreed to a lenient sentence in return for his testimony against more junior individuals.

Instead of striking a deal to secure La Grange’s testimony against more junior officials, the NPA should have focused on prosecuting him as one of the potential architects of the scheme.

It raises serious concerns about the quality of the PwC report and the NPA’s ability to build a robust case against La Grange.

Just imagine the public reaction if the NPA accepts a similar plea bargain with one of the Gupta brothers – central to South Africa’s state capture scandal – in exchange for their testimony against minor culprits.

Such a decision would likely incite public protests, underscoring the disparity in public perception and the unequal application of justice regarding corporate malfeasance.

The Steinhoff fraud represents far more than a corporate scandal – it is the largest corporate fraud in South African history.

With La Grange walking away with a mere five years of imprisonment, the state has squandered a vital opportunity to demonstrate that white-collar crime will be met with the full force of the law.

Instead, the outcome signals a disconcerting leniency, undermining public confidence in the ability of the justice system to hold powerful individuals accountable for their actions.

ALSO READ: The curious case of Steinhoff CFO Ben la Grange

As the dust settles from Steinhoff International’s collapse, South Africans are left to ponder the broader implications of this case.

Can a five-year prison term for a key figure in such a monumental fraud be considered an adequate form of justice?

What precedent does this set for future prosecutions of high-level corporate misconduct? The La Grange case will likely reverberate through South Africa’s legal and corporate spheres for years, leaving an unsettling legacy.

The message it sends about accountability in the face of executive misconduct is one that the country must urgently grapple with if it hopes to restore faith in its judicial process.

This article was republished from Moneyweb. Read the original here.