Former Steinhoff chief financial officer, Andries Benjamin la Grange. File photo
Nicola Mawson
Former Steinhoff CEO, Andries Benjamin la Grange, will spend five years behind bars after entering a plea with the state over his involvement in fraud at the now defunct company.
Yesterday, the Pretoria Specialised Commercial Crimes Court sentenced La Grange to 10 years in jail, with five years suspended for five years on condition that he is not found guilty of fraud during this time. He also must give evidence for the state in any further criminal proceedings against directors, officers and employees of the Steinhoff group.
La Grange’s sentencing follows that of Gerhardus Burger, who pleaded guilty to three charges of insider trading in contravention of the Financial Markets Act on 26 September and was given a five-year suspended sentence and had to pay back the proceeds of insider trading.
The former CFO was convicted of fraud involving more than R367 million stemming from his manipulation of financial statements and failure to report fraudulent activities.
Acting on the deceased former CEO and alleged kingpin of the fraud, Markus Jooste’s instructions, La Grange created documentation that supported fraudulent transactions used to inflate and falsify the Steinhoff Group’s annual financial statements of the Steinhoff Group for the 2016 financial year. After investigations by the JSE, La Grange was fined R2m for the role he played in the Steinhoff At Work transactions and was barred from holding office in a public company for 10 years.
Steinhoff found itself embroiled in an accounting scandal in 2017, with audit firm Deloitte confirming accounting irregularities. The financial fraud included several misrepresentations of its financial status and harmed South African investors, who incurred serious losses. Jooste fatally shot himself on March 21, the day after his arrest warrant was issued.
Former Steinhoff director and legal head Stephanus Grobler is out on bail of R150,000 and is set to make his second appearance in the Pretoria Specialised Commercial Crimes Court today.
Steinhoff was a multinational holding company that was listed in Germany and South Africa and was officially liquidated on October 13 last year. Its holdings were in the retail sector, mostly in furniture and household goods and included a 43.8% stake in the South African Pepkor group.
In a statement, the National Prosecuting Authority (NPA) and the Directorate for Priority Crime Investigation, commonly known as the Hawks, said in a statement yesterday that Jooste and La Grange defrauded a Steinhoff subsidiary, Steinhoff At Work, the board of directors of Steinhoff Manufacturing and Steinhoff South Africa of more than R367m.
Both the NPA and the Hawks have welcomed the judgement, with a statement issued by Lumka Mahanjana, NPA Regional Spokesperson, saying “securing a second conviction and sentence in the Steinhoff matter in just a week is a reflection that, even though the wheels of justice turn slowly, impunity no longer prevails, and those accused of complex commercial crime now know that it is a matter of when the dreaded knock on their door comes”.
The statement adds that “this case has been one of the most complex commercial crime cases” that they have had to deal with.
Last month, Gerhard van Deventer, the divisional executive of the Financial Services Conduct Authority’s enforcement division, told journalists that it was set to file a claim against Jooste’s estate to enforce the R475m penalty it had levied on him.
The South African Reserve Bank seized more than R500m from Berdine Odendaal, Jooste's rumoured former romantic partner at the time of his death. Among the items seized was a property valued at R18m, as well as millions in bank accounts.
BUSINESS REPORT