The National Prosecuting Authority (NPA) has defended its arrangement with Steinhoff in which the global furniture company will indirectly fund the investigation into the epic fraud allegedly committed by some of its executives.
In a statement released on Wednesday, the NPA defended the agreement struck between Steinhoff and audit and consulting firm PwC that will see Steinhoff advance R30m to PwC to continue elements of the massive forensic investigation that produced a 10,000-page report into how the fraud was perpetrated.
“It is accepted practice locally and internationally for complainant companies to commission these kinds of forensic exercises and the NPA can use the findings appropriately for the purposes of preparing any possible prosecutions,” the NPA said.
The prosecution authority made it clear it would receive no money from Steinhoff directly, and the only source of funds for the NPA’s investigation into the group will come from the SA Police Service. It has also been assured that none of the individuals accused of conspiring to commit fraud are still employed at the group.
PwC was appointed to undertake an investigation into the global furniture manufacturers’ “accounting irregularities” in December 2017 after the departure of former CEO Markus Jooste.
The forensic investigation, which has cost Steinhoff hundreds of millions of rand, became one of the largest probes of its kind in the world, and took almost two years to complete. While Steinhoff has steadfastly refused to publish the full report and its annexures, it did confirm that a small group of executives that included Jooste perpetrated fraud that led to the overstatement of accounts by about R105bn.
The NPA argues that this proposed arrangement is logical and makes sense, and will advance the cause of justice in the matter.
“PwC accumulated significant knowledge of the Steinhoff matter over the two years they were directly contracted by Steinhoff to investigate the accounting irregularities, prior to the initiation of the criminal investigation on the matter, and therefore had in-depth knowledge of the convoluted modus operandi applied by the suspects to perpetrate the offences, and of the complicated facts of this investigation,” the NPA stated.
The prosecuting authority’s proposal has received support from some unlikely quarters. Former NPA prosecutor Glynnis Breytenbach, when asked for her opinion in 2020, told Business Day that agreements of this nature are acceptable as long as the NPA does not tolerate any interference from the complainant — in this case Steinhoff.
While enforcement authorities have come under fire for appearing to drag their feet on the investigation, it has taken German authorities five years to finalise their investigation into Steinhoff. This resulted in the first formal charges being brought against its former executives last week.
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