The JSE, which fined Steinhoff International R13.5m in 2020 for releasing dodgy financial information, has imposed R2m in fines against the global retailer’s former CFO, Ben la Grange, as well as disbarring him as a director for any listed company for a decade.
After an investigation into the presiding officers of Steinhoff, the JSE said it has imposed two public censures and two R1m fines, with La Grange’s immediate disqualification after a failure to fulfil his duties with the necessary care and skill. This includes signing off a fictitious transaction that falsely inflated a subsidiary’s income by R376.6m.
“In arriving at this decision, the JSE considered, amongst other factors, Mr La Grange’s constructive and unwavering co-operation with the JSE’s investigation and his full and frank engagement with the JSE, where he provided various additional disclosures that assisted the JSE in its investigation against Steinhoff,” the JSE said.
Former CEO Markus Jooste abrupt resignation in December 2017 triggered a share price collapse and has been an existential threat for Steinhoff, which has only recently put years of legal wrangling behind it in looking to settle an array of lawsuits.
The JSE concluded that La Grange’s actions directly contributed to Steinhoff breaching listing requirements and that he “ought to have known that due to the numerous accounting irregularities” that previously reported financial information was incorrect, false and misleading.
One of the JSE’s fines relate to a subsidiary of Steinhoff Investment Holdings, Steinhoff at Work, with former CEO Markus Jooste providing La Grange with a handwritten document that La Grange ultimately processed.
As there was no actual transaction to support the invoice, the invoice issued by Steinhoff at Work was false, the JSE said, and as a result of this fictitious transaction the subsidiary’s income for the 15 months to end-September 2016 was inflated. This resulted in an operating profit of R47.54m, when it should have been a loss of R329.1m.
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