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Julia Irvine 26 Jul 2019 04:12pm

SAICA suspends ex Steinhoff CEO's membership

The South African Institute of Chartered Accountants (SAICA) has rejected an attempt by former Steinhoff International chief executive Marcus Jooste to resign his membership ahead of completion of the disciplinary hearing against him

At its latest meeting, the SAICA board considered a letter from Jooste’s lawyers. In it, they tendered his resignation and alleged that the outcome of the proposed disciplinary inquiry had been predetermined by the institute, following media reports in which SAICA’s CEO, Freeman Nomvalo, had confirmed that SAICA would be going ahead with the investigation.

The board refused to accept the resignation, choosing instead to suspend his membership pending finalisation of the proceedings against him.

Nomvalo said that SAICA’s bye-laws were designed to ensure that its disciplinary inquiries were carried out in an “independent, lawful and fair manner”.

Moreover, he told Jooste’s lawyers, Jooste “cannot avoid the disciplinary inquiry that SAICA has decided to initiate against [him] by handing in his resignation”.

Earlier this year, a forensic probe by PwC into Steinhoff, which owns Poundland, found the company had recorded $7.4bn (£5.9bn) worth of false transactions between 2009 and 2017.

The PwC investigation followed the group’s disclosure of the accounting fraud at the end of 2017 and subsequent departure of Jooste and other executives from the business.

The PwC team unearthed evidence that transactions made to seem independent of Steinhoff had in fact been constructed by a small group of former executives.

The transactions inflated earnings and asset values, and meant that over several years Steinhoff could artificially boost profits.

Since the revelations, Steinhoff’s market value has plummeted by 216bn rand (£11.3bn) – more than 95% of its value.

 

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