By: Nicola Mawson

THE Hawks on Friday morning announced that two more suspects were set to appear in the Pretoria Specialised Commercial Crimes Court on fraud charges relating to the corporate scandal at Steinhoff, South Africa’s biggest such company fraud so far.

The suspects, who have not been named as they have yet to be charged, are appearing on charges of Contravention of the Prevention of Organised Crime Act, Contravention of the Financial Markets Act, Contravention the Companies Act as well as for contravening the Prevention and Combating of Corrupt Activities Act.

These arrests are among several made in connection with the Steinhoff implosion. The company was delisted in both Johannesburg and Frankfurt in October 2023 as the noose tightened around key players in the fraud following confirmation in 2017 by auditors Deloitte that there were accounting irregularities.

According to a statement issued by the Hawks, the suspects – who are between the ages of 63 and 67 – handed themselves over on Friday morning. Their arrests are in relation to an ongoing investigation regarding fraudulent activities that took place at Steinhoff International Group, the specialised investigation authority said.

The suspects allegedly created fictitious transactions to the value of €6.5 billion (R197bn), which resulted in an impact on the company’s share price, both on the JSE and in Germany.

“This financial misrepresentation in Steinhoff International attracted numerous investors who became victims by investing large sums of money to purchase shares within Steinhoff,” the statement said.

Steinhoff shares tumbled after the fraud became known in 2017. Between August 2017 and March 2019, Steinhoff lost 97%, or $21 billion (R387bn at today’s rate) of its market capitalisation as investors reacted to the news.

The Hawks state that the financial loss occurred by the investors is estimated at €6.5bn.

“Further investigation discovered that a small group of Steinhoff Group executives implemented various transactions over a number of years which resulted in inflating the profit and asset value of the Steinhoff Group,” it said.

BUSINESS REPORT