For almost two-and-a-half years Heather Sonn was the acceptable face of Steinhoff. She took over the chairmanship in mid-December 2017 just weeks after the company’s announcement of ‘accounting irregularities’ pummelled the share price, destroying hundreds of billions of rands of shareholders’ money.
Her appointment was announced after investors had made it clear that Christo Wiese was no longer acceptable as chairman.
It proved to be an inspired choice.
Not only did she play a critical role in overseeing efforts to unravel the intricate web of suspect dealings that destroyed Steinhoff, she also had to deal with irate investors as well as incensed politicians.
Her dealings with politicians may have been the most stressful part of her job as MPs, with an eye to headline opportunities, quizzed her relentlessly on matters about which they evidently knew little. During each of the parliamentary portfolio committees at which she was called to given an account of the Steinhoff debacle, it was evident that few MPs other than the DA’s Alf Lees and the EFF’s Floyd Shivambu had bothered to do any preparatory research.
Sonn’s clear and calm exposition was commendable in the face of remarkable hostility, whether in parliament or at an extremely long annual general meeting.
On Monday Sonn resigned following the acknowledgement of a conflict of interest with a company she was a shareholder in that transacted with Steinhoff.
In a densely-worded Sens announcement Steinhoff explained that in 2017 Gamiro, in which Sonn has a major shareholding and her brother is a director, acquired a controlling stake in Blake and Associates from Geros. Blake is an external debt collector, whose clients include Steinhoff’s JD Group. Geros was apparently being funded by Steinhoff.
One long-term Steinhoff shareholder, who has abandoned hope of recovering any value from his investment, says the circumstances around Sonn’s decision is yet more evidence of the dense web of connections that former CEO Markus Jooste wove around the group.
“The Gamiro transaction with Geros looks like one of those deals Jooste used to co-opt people,” said the shareholder.
On Monday Steinhoff refused to respond when asked for some clarity as well as details about the sort of sum involved. “The company declines to comment further on this matter,” said a spokesman.
A tough and largely thankless job
The absence of detail has prompted speculation that Sonn may have used the opportunity to exit a tough and largely thankless job.
“It may well have been a way out of Steinhoff for Sonn,” said Lees, who added that he is disappointed by her resignation.
“I have always found her to be well-informed and clearly trying to do what is correct,” he said. “Her resignation, while it does seem to be an overreaction, is evidence she has great integrity.”
Meanwhile, chief investment officer of Aeon Investment Management Asief Mohamed said Sonn’s departure may have been prompted by a showdown within the board.
Shareholder activist Chris Logan said even people with integrity seem to suffer from association with Steinhoff and Jooste.
He also said it’s puzzling that the company relied on the controversial Viceroy Report for its intelligence. Logan was referring to Sonn’s explanation for her initial concern, which she said had been prompted: “When a name in the shareholding structure of the shareholder of Geros was recognised as a name that also appeared in the Viceroy Report.”
At that stage she requested (in December 2017) that the Gamiro-Geros transaction be placed on the list for investigation by PwC. “Unfortunately, it has taken over two years to get to a conclusion as to the nature of the relationship between the company and Geros, but there were multiple priorities for the company at the time,” said Sonn.
One analyst remarked that clearing the directors of any suspicion of conflict of interest should have been a top priority.
Sonn, who was appointed to the Steinhoff board in December 2014 when her father stepped down, was the last of the ‘old guard’ on the supervisory board. All of the remaining supervisory board members were appointed in either April 2018 or August 2019.
Lees said Sonn’s resignation “will leave a big credibility hole in Steinhoff which will be difficult to fill and does not augur well for Steinhoff as it battles for survival”.
Brought to you by Moneyweb