[ad_1]
Christo Wiese, chairman of Steinhoff International Holdings, had a weekend of tension. Hung in his vacation home in the port city of Yzerfontein, near Cape Town, he was barely out of his phone.
The 77-year-old billionaire had sold his chain of clothing stores to Steinhoff, making him the largest shareholder. Now, problems were being prepared.
The auditors of Deloitte LLP had refused to sign the annual accounts and, a few days earlier, he had asked Wiese if he knew that the managing director, Markus Jooste, had overseen years of fraud within the company.
Still, Wiese hoped that the owner of the French furniture retailer Conforama, the British Poundland and the Mattress Firm in the United States, would prevent a disaster. Jooste was due to return from Germany early this Monday, December 4, 2017, bringing the documents that he promised to alleviate. the preoccupations.
But the revelations of the next 48 hours would leave the global retail giant on the brink of collapse, wreck $ 13.7 billion in market value and tarnish the image of South African businesses.
Almost a year later, PwC's auditors conducted a long-awaited investigation into Steinhoff's books. It allowed them to better understand wrongdoing and those responsible.
Formal charges could follow against anyone involved in wrongdoing, according to the South African Police Unit known as Hawks.
This account of the impending collapse is based on numerous interviews, over a period of several months, with people involved in events that required anonymity to discuss private matters, as well as testimonials given at the time of the meeting. South African parliamentary hearings.
Early in the morning, on the first Monday in December, Wiese had traveled 90 minutes from Yzerfontein to the wealthy headquarters of Steinhoff in Stellenbosch, a rich city nestled among vineyards.
He met Steve Booysen, Chair of the Steinhoff Audit Committee, and representatives of Deloitte and PwC.
While they were waiting for Jooste's arrival, the first shockwaves of the impending earthquake began to spread.
The company said it would release its annual results on Wednesday, as planned, but with an important caveat: the results would not be audited. By lunch time, Steinhoff's shares had plummeted by 10%.
Minutes after the release of the statement, Wiese found that he had received a voice message from Jooste.
The CEO had just landed and was returning to take a shower at home. He requested that the auditors be lined up for an 11 am meeting because he had the required evidence. Dirk Schreiber, a German national and head of Steinhoff's finance in Europe, would join him.
Shortly before 10, it was Booysen's turn to hear from Jooste. He was not on the road yet and was taking legal advice, said the CEO in a text message – which, according to Booysen, hinted that accounts concealed many financial mistakes. Indeed, when the time of the meeting came, Jooste did not appear.
Neither Jooste nor his lawyer responded to requests for comment.
Chief Financial Officer Ben La Grange joined the growing concern group this afternoon after presenting the audited results of the Steinhoff-derived African unit, which he headed as CEO.
He had been summoned to a meeting in the offices over the weekend and had shown Deloitte's fraud allegations. He had said that it was better to wait until Jooste explained the problem.
Around 5 pm, Wiese received a call from a legal advisor asking if he was at Steinhoff and could receive a visitor. Upon his arrival, the lawyer stated that Jooste was at home in a deplorable state.
He refused to see Wiese face to face and offered his resignation. It was at this point that the billionaire realized that his worst fears were going to become reality.
Earlier Monday, Jooste had telephoned La Grange to invite her to Danie van der Merwe and Stehan Grobler, to meet him at Lanzerac, a winery, hotel and spa near his home that previously belonged to Wiese .
Around 8 pm, during a break from the audit committee meeting, they complied. Jooste looked shaken. He reiterated his plan to quit, but urged them to stay and promised to help fix the problem.
Back at the office, the audit committee met up to approximately 23 hours. At that time, Schreiber, who had arrived alone earlier in the day, made a staggering revelation that the seizure of cash equivalents in the company's accounts was incorrect and that the balance was overvalued.
The next morning, Bruno Steinhoff and his daughter Angela arrived at the Cape Town International Airport for the planned preparatory committee meeting. Bruno, who founded the company in the 1960s, no longer has an operational role, but Angela and he sit on the board of directors each and hold shareholdings.
This weekend, Bruno had just seen Jooste on the occasion of his 80th birthday in Germany. He had no idea what he was going to hear. Wiese met them at the office with a sense of terror and told them what had happened.
Her warning that the value of their shares could be erased left Angela Kruger-Steinhoff visibly shaken.
As a general rule, the board meeting that took place prior to the publication of the annual results was animated by the debate discussed about dividends and planning for the coming year. This time, when director Heather Sonn arrived, she looked around the meeting room and asked what was going on and said it sounded like a funeral.
Wiese started Tuesday's meeting by informing the board of directors and then asked him whether to accept Jooste's proposal to resign or ask him to fix the problem. The consensus was that Jooste should be invited to enter. Around 11 am, Wiese called him.
Jooste was with his lawyers in Cape Town and took the call. Wiese told him that everything he had done was done, but that he could always try to save the company and come help him settle the mess.
Jooste replied that he would be there in two to three hours. But again, he failed to show and this call was the last time the two men spoke.
The board began to prepare to announce that Steinhoff had instructed PwC to conduct a judicial audit and to align lawyers and administrators to stabilize the vessel.
Around 5 pm, a director received a text that seemed to have been written by Jooste, saying that he had made some big mistakes and that he had never wanted to hurt anyone, but that It was time for him to move. sure.
The fear that this word will be disclosed has increased their urgency to publish the statement.
In Germany, at 21:44, the company announced the investigation into the accounting irregularities and the resignation of Jooste. The stock plunged 62% in Johannesburg early in the negotiations.
Wiese resigned 10 days later, replaced as non-executive chairman by Sonn, director of Steinhoff and daughter of a former South African ambbadador to the United States. Earlier this year, she compared the retailer to a building in flames.
In the twelve months since the start of the crisis, Steinhoff has sold badets, suspended executives, declared bankruptcy of Mattress Firm, closed stores and negotiated late payments with bondholders and lenders, all while a survey conducted by the regulators.
Read: Jooste de Steinhoff advised his friends by SMS to sell their shares before the stock collapse.
[ad_2]
Source link
