Parliament, Tuesday, 12 December 2017 – The Standing Committee on Finance has expressed outrage at what has happened at Steinhoff and utterly condemns the company’s behaviour. The Committee urges the Financial Services Board (FSB), the South African Reserve Bank (SARB), the Independent Regulatory Board for Auditors (IRBA) and the Johannesburg Stock Exchange (JSE) to expedite their investigations and release the outcomes to the public.
The Chairperson of the Committee, Mr Yunus Carrim, said: “This experience, once again, confirms the need for tighter regulation and monitoring of companies and for more effective regulatory bodies. We are concerned, not just about the financial losses suffered by the Public Investment Corporation (PIC), the Government Employees’ Pension Fund (GEPF) and the government employees they represent, but also about the prospects of major job losses for workers in Steinhoff companies.”
Mr Carrim said the Committee is also concerned about the consequences for the retirement and saving funds of many other investors in Steinhoff through various pension fund managers.
“Alleged fraud of this scale requires swift and decisive action of regulators both in and outside South Africa. The perpetrators have to be prosecuted and sanctioned to the full extent of the law. Although the full nature and extent of the fraud is not yet known, the events at Steinhoff raise questions of the appropriateness of governance oversight frameworks, corporate incentives and the role of entities trusted to ensure discipline in corporates, such as the asset management and accounting industry,” said Mr Carrim.
The Committee believes that as a listed company on both the Frankfurt and JSE, the two stock exchanges and their regulators (Bafin in Germany, and the FSB and SARB in South Africa) must urgently investigate Steinhoff’s conduct and take appropriate action, including reporting all transgressions to prosecutorial agencies or other regulators. Regulatory and prosecutor agencies in the two countries must cooperate effectively.
Working with the Standing Committee on Public Accounts, the Committee will play a full oversight role and will call the regulatory bodies, the National Treasury, the PIC, GEPF, Steinhoff representatives and any other relevant stakeholders to account to Parliament as soon as it reconvenes in late January 2018.
“In the meanwhile, we are writing to the regulatory bodies to find out what action they are taking and their timelines for finalising outcomes, and to the PIC and GEPF about the extent and implications of the financial losses,” said Mr Carrim.
ISSUED BY PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON, MR YUNUS CARRIM
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