Former Steinhoff CFO Ben la Grange’s guilty plea places his colleague and former head of treasury Stéhan Grobler at the centre of the fabricated R376m invoice that put 50-year-old La Grange behind bars for five years.
Grobler appeared briefly in Pretoria’s specialised commercial crimes court on Friday before the case was postponed to February 14 for further investigation and for it to be transferred to the Pretoria high court.
Prosecutor Dries van Rensburg noted that Grobler needed to familiarise himself with the contents of the plea by La Grange, who is expected to testify against him.
Grobler faces nine charges, including racketeering, fraud, falsifying financial statements and failing to report fraudulent activities. He has denied the charges against him.
The state’s indictment highlights Grobler’s close association with former CEO Markus Jooste and La Grange. “The relationship between Jooste, Grobler and La Grange regarding the Steinhoff Group was one of trust,” states the indictment.
La Grange was sentenced last Thursday to 10 years in prison, with five years suspended, after entering into a plea deal with the state. He was convicted on one count of fraud.
His guilty plea centred on a fictitious invoice for R376m, created at Jooste’s instruction.
According to the plea, La Grange knowingly inflated the company’s operating income in 2016 by creating a false sourcing rebate for Steinhoff At Work, a Steinhoff subsidiary.
“On or about 17 November 2016, I was travelling on a private plane with (Jooste). Jooste prepared a handwritten note in my presence and instructed me to allocate a rebate for Steinhoff At Work,” La Grange confessed.
The fabricated invoice, reflecting a nonexistent transaction with TG Sourcing Services SARL, was recorded as legitimate income in Steinhoff’s financial statements for the year ending September 2016.
“There was no legitimate business transaction between Steinhoff At Work and TG Sourcing Services SARL that could have provided a basis for issuing the invoice,” La Grange admitted.
The plea detailed how La Grange executed the fraud by co-ordinating with senior company officials, including Grobler.
“On 18 November 2016, I asked Stephanus Johannes (Stéhan) Grobler, the head of treasury of the Steinhoff Group, to whom the invoice should be issued, as Jooste’s note only mentioned ‘TG Sourcing’ and not the required company details for issuing an invoice.”
According to the plea, Grobler told La Grange to issue the invoice to “TG Sourcing SARL” of Martigny, Switzerland. It was issued for a “sourcing rebate for the period July 2015 to September 2016”.
According to La Grange, “Grobler and others” then created fake documents to make it appear that the invoice reflected a real claim.
“Grobler and others caused Steinhoff Finance Holding GMBH to pay the invoice amount to Steinhoff At Work, disguising it as a payment by TG Sourcing. Steinhoff Finance never recovered the money from TG Sourcing. The ostensible payment of the invoice was, in other words, no more than a flow of money within the Steinhoff Group,” the plea states.
The charges stem from Steinhoff’s financial misconduct from 2014 to 2017, culminating in the company’s collapse in December 2017. Steinhoff was once a global retail giant listed in Germany and SA. Its share price plunged 90%, wiping out more than R230bn in market value when the scandal broke.
The scandal was driven by inflated earnings and asset values, resulting in R100bn in fictitious sales, deceiving investors and benefiting members of Steinhoff’s management.
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