Business

Hilton Tarrant
4 minute read
29 Jan 2018
9:55 am

The curious case of Steinhoff CFO Ben la Grange

Hilton Tarrant

Why did it take him over a month to resign?

Fifty-one days after the shock announcement that Markus Jooste had resigned as CEO of Steinhoff International, the group’s former CFO Andries Benjamin (Ben) la Grange no longer holds any fiduciary role – executive or non-executive – at the beleaguered retailer, or its African subsidiary. But the journey to get here has been very peculiar indeed.

Many, myself included, wondered why La Grange wasn’t forced to step down with Jooste, considering he (along with Jooste and COO Danie van der Merwe) had signed off on the most recent interim financial results. Out of the three, only Van der Merwe remains in his executive role (as COO and acting CEO of Steinhoff, and a non-executive director of Steinhoff Africa Retail).

On December 6, Steinhoff Africa Retail (Star) said that La Grange, then CEO of the subsidiary, had “decided to step down”… “in light of… developments at Steinhoff”. He remained a non-executive director, at the request of the board.

La Grange was appointed CEO of Star on July 1 2017, ahead of its separate listing on the JSE on September 20 2017. He held this role together with his role as group CFO of parent Steinhoff International Holdings. Upon listing, according to Star’s pre-listing statement, he held active directorships at a dozen other group companies, and was alternate director at PSG Group, PSG Financial Services and IEP Group (Pty) Ltd. It is likely that he no longer holds many of these directorships, as he is no longer group CFO.

On December 19, two weeks after Jooste’s resignation, Steinhoff announced that Van der Merwe was “designated” acting CEO. At the same time, it appointed Conforama CEO Alexandre Nodale as deputy CEO and (group General Counsel) Louis du Preez as commercial director. It confirmed in this announcement that La Grange continued in his role as group CFO, with the management board comprising these four directors.

On January 2, the group announced that along with the 2016 financial results, 2015 numbers would also have to be restated. This emerged from the work done by PwC who was investigating “certain accounting irregularities resulting from the concerns raised by Deloitte”. Steinhoff had already alerted the market on December 13 that the “2016 consolidated financial statements of the company will need to be restated and can no longer be relied upon”.

At this point, La Grange’s position moved far beyond untenable as the financials for 2015 and 2016 had been prepared by and signed off by him. He was directly responsible.

Two days later, Steinhoff announced that “further changes to the management of the company have been made”.

“The current CFO, Ben la Grange has today stepped down as CFO and as a member of the management board to focus on the preservation and procurement of liquidity in the group, in addition to the finalisation of the company’s audited 2017 consolidated financial statements and comparative statements.”

From that point, he no longer held an executive or non-executive role at Steinhoff International, although its website still mistakenly lists him as a member of the group executive committee (in his previous role).

Source: Steinhoff website

The group has made no further announcement about La Grange, but it is likely that he is still playing these roles, i.e. finalising the 2017 financials and preserving liquidity. We’ve seen a number of brief announcements about the latter in two presentations to bankers on December 19 and January 26. As for the looming deadline of month-end for those audited financials? Crickets, barring a completely meaningless one-liner in Friday’s presentation: “Timing of 2017 accounts and prior year restatements to be confirmed in context of PwC process”.

On Thursday (January 25), Steinhoff Africa Retail announced to shareholders that La Grange had “tendered his resignation as non-executive director from the board of Star, with effect from January 24 2018”.

It noted in the statement that “Ben played a very important part in the establishment of Star and its successful listing on the JSE. The board wish to thank Ben for his valuable contribution made to Star”.

La Grange has been with Steinhoff since 2003, when he joined as manager of its corporate tax division. He was appointed as CFO on March 5 2013.

Prior to this, until the end of the 2012 financial year, this role was filled by Frikkie Nel, who was appointed financial director in 1990. He still holds this position in Steinhoff International, a guarantor for South African debt (not to be confused with the Frankfurt- and JSE-listed Steinhoff International Holdings NV).

Source: Company presentation to bankers: December 19 2017

Is this the last we’ve heard of La Grange? Given the number of separate investigations into Steinhoff, especially PwC’s one into “accounting irregularities”, likely not. The real question is why he managed to (stubbornly?) stick around for a month as group CFO (and why did he and/or the board think it would be okay to remain a director of Star thereafter)?

Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

He holds shares in Steinhoff International, first acquired in September 2010.

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