Steinhoff bought forests linked to executives at inflated prices

A company linked to executives of Steinhoff International Holdings bought South African forestry plantations in 2001 and then sold them to the retailer three years later for more than five times their original value, documents show.

11 July 2018 | Business

The PwC investigation into Steinhoff has an open mandate to identify transgressions and those responsible. - Steinhoff

Steinhoff, which plunged 96%t after disclosing accounting irregularities and chief executive officer Markus Jooste quit in December, commissioned PricewaterhouseCoopers to investigate its finances and has said restatements may have to go back to at least 2015.

The forestry deal is similar to car dealership transactions Steinhoff carried out in 2007 where it bought properties from companies linked to Jooste at a multiple of their initial value.

Steinhoff declined to comment on the forestry transactions, saying it is awaiting the outcome of the PwC probe.

Since December the global retailer has been selling assets and trying to persuade creditors owed more than €9bn not to force it into insolvency. With the equivalent of almost US$17 billion having been wiped off its market value, the saga has become one of South Africa’s biggest-ever corporate scandals.

Steinhoff’s venture into forestry came shortly after Jooste, 57, became managing director in 2000. The company began buying assets to produce the timber needed for the furniture it sold, annual reports show.

Trademarks, vehicles

Steinhoff agreed in 2001 to pay R15.8 million for trademarks, vehicles and equipment owned by forestry companies Thesen & Co and Thesen Properties, sales agreements seen by Bloomberg show.

The deal did not include any Thesen plantations and instead Thesen sold 55 properties to Malenge Sawmills, which took a loan from Steinhoff to help with the R29.5m purchase, according to tax court documents and sales agreements seen by Bloomberg.

Steinhoff managed the plantations that Malenge bought. In 2004, Steinhoff bought 53 of those plantations from Malenge, by then known as Kota Sawmills for R159.7 m, court documents and company minutes seen

Between 2001 and 2004 the following Steinhoff executives at times served as directors of Malenge and/or Kota – Stephanus Grobler, Frederik Nel, Jan van der Merwe, Gary Chaplin and Danie van der Merwe, who has been acting CEO of Steinhoff since December.

Chaplin and both Van der Merwes resigned from Malenge on May 31, 2001, while Grobler and Nel stayed on, according to corporate filings and company minutes seen by Bloomberg.

PwC probe

Chaplin said he resigned from Malenge before the transactions were executed and wasn’t aware of their details. Jan van der Merwe didn’t respond to questions sent by text message and didn’t return phone calls.

“The PwC investigation into Steinhoff has an open mandate to identify transgressions and those responsible,” Steinhoff said, adding that it was also commenting on behalf of Danie van der Merwe and Nel. Grobler declined to comment, citing the PwC probe.

Kota sold the plantations to Steinhoff in 2004, recording a R125.6 million profit for that financial year, shortly after entering a funding agreement with Mayfair Speculators, of which Jooste was the sole director.

Kota listed Mayfair as a company to which it was making loans, some of them interest free, according to its financial statements. Jooste’s lawyer, Callie Albertyn, didn’t respond to emailed questions or return a call made to his office.

Impairments, loss

Steinhoff said in its half-year results to March that PwC is working to identify all transactions that weren’t done at “arms length” or at market-related prices and a final report isn’t due until the end of the year. Having had to impair some assets involved in questionable transactions, Steinhoff wrote off €12.4 billion in the first half and declared a record net loss of €621 million.

Between 2001 and 2004, Kota was wholly owned by Switzerland’s Fihag Finance Handels and Fihag was also one of Steinhoff’s biggest shareholders, company filings and annual reports show.

Fihag was owned by Steinhoff’s founder, Bruno Steinhoff, until he said he sold it in 2003. His daughter, Angela Kruger-Steinhoff, was one of its directors over the same period.

She is currently a member of Steinhoff International’s supervisory board. Steinhoff also said Kruger-Steinhoff couldn’t comment because of the PwC probe. Fihag didn’t respond to queries.

After these early deals, Steinhoff went on to buy assets ranging from furniture retailers in South Africa to discount chain Poundland in the UK, Conforama in France and Mattress Firm in the US.

South African billionaire Christo Wiese became a major shareholder and Steinhoff’s chairman after a series of deals that started in 2014. He’s now suing the retailer for R59 billion over losses he incurred as a result of the disclosure of accounting irregularities.

Steinhoff has said it’s assessing the claims and will determine “the appropriate course of action.”

The company behind the forestry transactions and the car dealership sales still exists. It’s now called Kluh Investments, with Kota having changed its name again in 2007, and Jooste’s son-in-law Stefan Potgieter is its sole director.

He’s also the only director of Mayfair Speculators. Potgieter didn’t respond to queries.

-Fin24

Similar News

 

Production nosedives at Langer Heinrich

3 hours ago | Business

Langer Heinrich produced 47% less uranium oxide in the June quarter compared to the first three months of the year, Paladin Energy, its majority shareholder,...

Company news in brief

19 hours ago | Business

MTN's Dubai subsidiary sells MTN CyprusSouth Africa-based mobile telecommunications company MTN Group Ltd said on Monday its Dubai subsidiary sold its Cyprus business to Monaco...

Erongo electricity tariffs increased

1 day - 17 July 2018 | Business

Otis Finck at Walvis Bay - The Erongo Regional Energy Distributor (Erongo RED) announced an average weighted tariff increase of 4% for the period July...

Company news in brief

1 day - 17 July 2018 | Business

Workers resume at MTN Nigeria ...

Battle between former Tekkie Town execs and Steinhoff Africa...

2 days ago - 16 July 2018 | Business

Shoe retailer Tekkie Town was bought by Steinhoff International in late 2016. It was later transferred to STAR, the JSE-listed company that contains Steinhoff's African...

Company news in brief

2 days ago - 16 July 2018 | Business

Intel acquires small chipmakerIntel Corp said on Thursday that it plans to acquire eASIC, a small chipmaker that will help further Intel’s efforts to diversify...

Company news in brief

2 days ago - 16 July 2018 | Business

Intel acquires small chipmaker Intel Corp said on Thursday that it plans to acquire eASIC, a small chipmaker that will help further Intel’s efforts to...

Company news in brief

5 days ago - 13 July 2018 | Business

Rio Tinto operation in South Africa shut by protestsA mineral sands operation on the South African coast run by Rio Tinto has been closed since...

Bidvest Nam widens acquisition net, disposes of BidFish

6 days ago - 12 July 2018 | Business

Bidvest Namibia Property Holdings, a wholly-owned subsidiary of locally listed Bidvest Namibia, has acquired the remaining shares in Namsov Industrial Properties and United Fishing Enterprises,...

Company news in brief

6 days ago - 12 July 2018 | Business

Woolies recalls frozen riceWoolworths said on Tuesday it has issued a recall of its frozen savoury rice mix product which contains sweetcorn imported from a...

Latest News

Calle urges parties to account

19 hours ago | Economics

NDAMA NAKASHOLEFinance minister Calle Schlettwein has urged each political party to remain accountable to the public in regard to the public funds it receives.The figures...

Rest easy, gentle giant

19 hours ago | Opinion

The late Theo-Ben Gurirab was without an iota of doubt a gentle giant, whose life was lived in service and dedication to Namibia's struggle for...

Dangote signs US$650mln Afreximbank loan

19 hours ago | Economics

Africa’s richest man, Aliko Dangote, has signed a US$650 million loan facility with the African Export-Import Bank (Afreximbank) for his oil refinery project in Nigeria.Africa’s...

New revenue agency operational by...

19 hours ago | Government

Finance minister Calle Schlettwein is optimistic that the much-anticipated Namibia Revenue Agency will be operational come 1 March 2019. This will coincide with the start...

Dippenaar blames Joschko for crash

19 hours ago | Justice

Jandré Dippenaar has placed the blame for a crash in which six people died squarely on the shoulders of Markus Walter Joschko, who was also...

CIF, NSI highlight criticality of...

19 hours ago | Economics

STAFF REPORTERAn efficient use of scarce financial resources both in the public and private sector demands an awareness and application of building standards and adherence...

Ramaphosa talks tough on mine...

19 hours ago | Economics

Safety is a huge issue in South Africa’s deep and dangerous mines and increasingly a focus for investors. A spate of deaths at Sibanye-Stillwater’s gold...

NAB appoints new CEO

19 hours ago | Agriculture

The Namibian Agronomic Board (NAB) has announced the appointment of Dr Fidelis Nyambe Mwazi as its newly appointed CEO. Mwazi takes over the reins from...

Seed bill could limit imports...

19 hours ago | Agriculture

The Seed and Seed Varieties Bill, expected to be adopted by the National Assembly, could limit the importing and exporting of seeds, finance minister Calle...

Load More