The South African Police Service (SAPS) has transferred the Steinhoff fraud case to the Hawks for more in-depth investigation. Two former Steinhoff executives, Hein Odendaal, 67, and Iwan Peter Schelbert, 62, voluntarily surrendered themselves to the Hawks’ Serious Commercial Crime Investigation unit in Pretoria. They appeared in the Pretoria Specialised Commercial Crimes Court on the same day, facing charges related to contraventions of various acts including the Prevention of Organised Crime Act, the Financial Markets Act, the Companies Act, and the Prevention and Combatting of Corrupt Activities Act.
The arrests are part of a larger investigation into what the National Prosecuting Authority (NPA) has described as one of the most significant cases of corporate fraud in South Africa’s history. The investigation revealed that Steinhoff executives engaged in fraudulent activities, creating fictitious transactions amounting to 6.5 billion euros (R197 billion). These actions had a substantial impact on the share prices of both the Johannesburg Stock Exchange (JSE) and the Frankfurt Security Exchange (FSE).
The fraudulent activities came to light in 2017 when Steinhoff’s auditors refused to sign off on the 2016 annual financial statements. It was discovered that false and misleading financial statements had been submitted by Steinhoff during the financial years of 2014 to 2016, leading to a significant drop in the value of Steinhoff shares and causing substantial financial losses to investors.
Odendaal and Schelbert, the new suspects in the Steinhoff fraud case, have held prominent positions within the company. Odendaal served as the managing director of two Steinhoff affiliates in the UK and was a director of Steinhoff Africa Holdings and Steinhoff At Work. Schelbert was the managing director at Steinhoff At Work from June 2004 to March 2018. They appeared in court alongside Stéhan Grobler, Steinhoff’s former treasury head, who was arrested on fraud and racketeering charges in March last year.
The investigation has already resulted in significant convictions, with former Steinhoff CFO Andries “Ben” la Grange receiving a 10-year sentence, of which five years were suspended, for his involvement in fraud amounting to R367 million. Additionally, Gerhardus Diedricks Burger was convicted of insider trading and received a five-year prison sentence.
The case took a tragic turn with the death of former Steinhoff CEO Markus Jooste in March 2024. Jooste allegedly took his own life after the Financial Sector Conduct Authority imposed a hefty penalty. The investigation continues to uncover assets tied to the fraudulent activities, with the South African Reserve Bank seizing approximately R67 million from Grobler.
As the investigation progresses, the Hawks are taking further steps to unravel the complexities of the Steinhoff fraud case. The case has highlighted the importance of transparency and accountability in corporate governance, shedding light on the consequences of fraudulent activities within multinational companies.
