The great Steinhoff heist: R28bn later and nobody went to jail
Image: Armand Hough/African News Agency (ANA)
IN a decisive move that closes the chapter on one of South Africa's most infamous corporate scandals, Ibex Investment Holdings — formerly Steinhoff International — has sold its entire 28.48% stake in Pepkor Holdings for about R28 billion.
The transaction not only marks the financial and symbolic end of the Steinhoff era but also signals a seismic shift in the country's retail and investment landscape.
Steinhoff has spent years untangling the wreckage of the 2017 accounting scandal that erupted when auditors refused to sign off the group's financial statements. As the SA Reserve Bank (Sarb) noted in a statement released this week: 'The discovery of the now well-known accounting irregularities in the Steinhoff Group resulted in the immediate and sharp decline in Steinhoff's share price… eroding approximately 90% of the company's market capitalisation.
'This company crisis threatened the Steinhoff Group's continued existence and risked consequences, including forced asset sales or 'fire sales', significant losses to South African and foreign financial institutions and investors, and extensive job losses in South Africa and abroad. It also risked significantly affecting South Africa's reputation as one of the most robust and well-regulated financial markets in the world.'
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The fallout revealed irregular transactions totalling €6.5bn (R120bn), as uncovered by PwC's forensic investigation. The scandal triggered a cascade of regulatory probes, shareholder lawsuits, and a catastrophic loss of investor confidence across global markets.
In 2023, Steinhoff officially rebranded as Ibex as part of its restructuring efforts to settle debts and salvage value. According to SARB: 'These processes resulted in the Steinhoff Group fully repaying over R28bn owed to South African banks in 2018 as well as compensation to other South African investors amounting to approximately R18.5bn as part of the global settlement.'
The sale of its Pepkor stake, the last major asset in its portfolio, represents the final act in this protracted unwinding. Executed via an accelerated book-build, the shares were priced at R25.45 each, swiftly absorbed by investors.
In its stock Exchange News Service (Sens) announcement, Ibex framed the sale as a strategic necessity: 'The divestment of the Pepkor stake is a critical step in concluding the legacy issues left by the Steinhoff financial irregularities. The proceeds will be used to further reduce debt and improve balance sheet strength.'
While Ibex bows out, the Public Investment Corporation (PIC), Africa's largest asset manager, has deepened its commitment to Pepkor, increasing its stake from 14.91% to 15.46%. This vote of confidence comes as Pepkor reported a robust 23.4% surge in half-year net profit to about R3bn, driven by, among others, aggressive retail expansion across nearly 6 000 stores in Africa and beyond.
The sale follows years of fraught litigation between Ibex and Sarb, which had frozen billions in Ibex's Pepkor shares. Courts eventually ruled the Sarb's actions legally unfounded, and a judicial order forced the release of the funds.
Sarb stated: 'Beginning in early 2023, various disputes arose between the Ibex Group and the Sarb relating to administrative actions taken by the Sarb against Ibex Group companies arising from various alleged contraventions of the Exchange Control Regulations.
'One of these disputes involved the forfeiture for the benefit of the State of an amount of approximately ZAR6.3 billion, and others concerned blocking and prohibition orders issued by the SARB over funds and assets of the Ibex Group.'
The final settlement saw Ibex forfeit R6.3bn plus interest to the state, a costly but necessary resolution to unlock the stake's sale. 'In coming to the settlement agreement and fully and finally resolving the disputes between them, the Sarb and the Ibex Group considered the public interest, the Sarb's mandate of enforcing the Exchange Control Regulations, and the importance of enhancing investor confidence in South Africa.
'R6.3 billion, plus interest, of Ibex Group funds was forfeited to the State in full and final settlement of the Sarb's enforcement action against the Ibex Group in relation to the Alleged Contraventions.'
'The Sarb has granted permissions to the Ibex Group to implement and take all steps that are necessary for the Ibex Group to implement its Dutch court-approved structured winding down process. The SARB has agreed not to take any further administrative or enforcement action against the Ibex Group in respect of the Alleged Contraventions,' read Sarb's statement.
For Christo Wiese, the retail tycoon who built Pepkor and was once Steinhoff's largest shareholder, the transaction can be described as a somewhat bittersweet milestone. His fortune was decimated in the scandal's wake, and his resignation from Steinhoff's board marked the end of an era.
The Steinhoff debacle exploded in December 2017 when the company abruptly delayed its audited results, sparking panic. The then chief executive, Markus Jooste, resigned when PwC was appointed to investigate accounting irregularities. The probe uncovered a vast fraud — R100bn in fabricated transactions dating back to 2009, designed to inflate profits and conceal losses. The revelations obliterated 97% of Steinhoff's market value and triggered global investigations.
Jooste, who headed Steinhoff from 2000 until his resignation in 2017, has been widely identified as the orchestrator of the fraudulent schemes, along with a cohort of senior executives. The company's former chief financial officer, Ben la Grange, and directors Stephanus Johannes Grobler and Danie van der Merwe are charged with racketeering and fraud related to manipulating the financial statements with fictitious transactions totalling over R20bn.
The National Prosecuting Authority's indictment described a 'systematic and organised' deception involving sham transactions with supposed third parties to fabricate income.
Before the scandal fully unravelled, investigative financial research group Viceroy Research sounded alarms over Steinhoff's opaque financial dealings. Their reports scrutinised questionable accounting practices, off-balance-sheet entities, and suspicious related-party transactions, red flags that foreshadowed the looming storm.
Reflecting on the resolution, Sarb stated: 'Both the Sarb and the Ibex Group consider the settlement reasonable, proportionate and justifiable in light of the complex and competing interests. Considering the long history of the Steinhoff/Ibex matter… the Sarb and the Ibex Group consider this final settlement to be in the best interests of South Africa.'
Ibex's exit from Pepkor is more than a financial transaction; it is the closing act of a saga that exposed deep failures in auditing, governance, and regulation.
While the PIC's renewed investment signals confidence in Pepkor's future, the Steinhoff scandal remains a grim reminder of corporate fraud's destructive power. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
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