Inge Lamprecht
4 minute read
20 Apr 2018
7:25 am

‘Steinhoff fraudsters need to go to jail’

Inge Lamprecht

BLSA says it will ensure those found liable are prosecuted.

Business Leadership South Africa (BLSA) says it will ensure that those found to be liable for Steinhoff International’s demise are prosecuted.

“We need to isolate [and] expose the few that have acted in a manner that is less than wholesome and in some instances even in a fraudulent manner…. We will be the strongest proponents that somebody needs to go to jail for this, otherwise what we stand for will amount to nothing,” CEO Bonang Mohale told a media briefing where BLSA reiterated its commitment to fight corruption on Thursday.

His comments came just one day before Steinhoff’s annual general meeting (AGM) in Amsterdam. Investors hope the AGM will provide more clarity on the way forward for the embattled furniture retailer, after an accounting scandal wiped out more than 90% of its market capitalisation.

“In the case of Steinhoff in particular… with the facts before us – there is no doubt that the intent was corruption and if you intend on defrauding people you will find ways to hide it in a manner that ordinary boards will find difficult to unearth.”

Mohale said in line with the King IV Code of Corporate Governance, the amended Companies Act held individual directors personally liable. The Steinhoff debacle could be a “test case”.

The business community simply couldn’t accept being painted with a black brush because of the actions of a few entities, he added.

BLSA has engaged with firms previously implicated in corporate corruption, including Steinhoff, KPMG, SAP and McKinsey to understand the issues and to demonstrate its commitment to work with them to restore good corporate governance.

“In the case of Steinhoff for instance, this is probably the biggest blight in terms of magnitude – but also because of the people involved – because all of us have been conned.”

Mohale said on the surface, Steinhoff was one of South Africa’s greatest investors and probably had one of the most competent boards, which included individuals who knew how to run big, complex entities, but who were blindsided.

As part of a set of “ambitious proposals” to inform the current socioeconomic engagement agenda, BLSA said it was committed to working with law enforcement agencies on bringing state capture and corruption cases to court speedily, to protect anti-corruption whistle-blowers, working with the South Africa Revenue Service (Sars) to restore tax morality and expediting VAT refunds and to assist in ensuring social grants reached their intended beneficiaries.


In an effort to boost the economy, president Cyril Ramaphosa, on Monday announced thatgovernment aimed to raise at least R1.2 trillion ($100 billion) in new investments over the next five years.

Mohale said BLSA understood that the president was looking for $100 billion of foreign direct investment (FDI) as well as $100 billion from local investors.

“If we achieve these figures I think it can double our GDP growth that we’ve experienced up until now.”

The International Monetary Fund (IMF) raised its economic growth forecast for South Africa from 0.9% to 1.5% for 2018 and from 1.6% to 1.7% for 2019. The local economy grew 1.3% in 2017.

Business wants to play a role in securing new investment, demonstrate that it is not on an investment strike and will ask its members to put their money where their mouths are, Mohale said.

He added that its members could help the president by ensuring that it was more understanding when dealing with state-owned enterprises (SOEs).

Since government was the lender of last resort, SOEs were unlikely to default and therefore unlikely to be unable to meet their covenants. Against this background it would ask some of the banks to restructure loans to SOEs in the long term, he said.

“It gives them a little bit of breathing space. We do that in our private businesses when we are falling into hard times but we also look at favourable terms as compatriots, as patriotic capital.”

BLSA would also ask its members to consider to avail resources – including suitably qualified and experienced individuals – to serve on the boards and management of SOEs and would work with government to optimise its SOE portfolio to cut waste and improve efficiency, profitability and cash flow.

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