Steinhoff stench spreads to banks

The crisis in corporate South Africa has deepened, with news that leading bank Absa may be called to account for its dealings with retailer Steinhoff.

This latest reputational mishap follows the exposure of numerous Gupta misdoings, and the woes of the VBS bank, both of which have tainted accounting giant KPMG.

The latest revelation is that a Dutch non-profit organisation VEB  has launched a class action, which targets Absa, Barclays and Commerzbank.

Absa is under fire over its role in preparing a Steinhoff prospectus to shareholders in 2015, which was linked to the company’s stock exchange listing in Frankfurt.

The Steinhoff scandal broke in Europe late last year,  when the Germans noticed some dodgy accounting practices, which had the effect of over-valuing Steinhoff assets.

“The prospectuses were misleading – VEB questions whether the prospectuses properly represent Steinhoff’s financial position.

“VEB concludes that the banks have – in their respective roles and capacities – acted wrongfully in respect of Steinhoff investors,” the Dutch group is quoted as saying.

VEB has also indicated that it might pursue auditors Deloitte over the Steinhoff scandal.

The market value of Steinhoff tumbled by hundreds of billions of rand when the scandal became public.

In another development, prominent businessman Johan van Zyl, a former Sanlam CEO, announced his resignation from Steinhoff’s supervisory board.

Absa is headed by CEO Maria Ramos, the wife of politician and businessman Trevor Manuel. He has just been appointed by President Ramaphosa as a special investment envoy, part of a team to attract R100 of new investment to SA.

He may not spend much time in the Netherlands.  Or Germany.

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