Steinhoff forfeits R6. 3bn to settle long-standing battle with SARB
In a statement released on Thursday, the central bank said that it and Ibex Group had resolved all the disputes between the two parties in a 'comprehensive settlement'.
'Both SARB and the Ibex Group consider the settlement reasonable, proportionate and justifiable in light of the complex and competing interests,' the central bank's statement said. 'SARB and the Ibex Group consider this final settlement to be in the best interests of South Africa."
SARB said that the deal followed it having taken legal advice, considered the public interest, its mandate in terms of forex, investor confidence in South Africa, and promoting regulatory certainty by allowing the Ibex Group to settle its contractual obligations to its foreign financial creditors, it had agreed to settle the matter.
The deal allows Ibex to settle SARB's enforcement action by ceasing litigation over R6.3 billion – plus interest – of funds that had already been forfeited to the state. At the same time, SARB has granted permissions for Ibex to implement its Dutch court-approved winding down of the remaining Steinhoff business units that it did not take over.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
a day ago
- The Citizen
Prasa initiates probe into R18bn tender after Hawks raid
The Hawks swooped in on Prasa's headquarters in Braamfontein seizing laptops, mobile phones and a trove of documents. A Passenger Rail Agency of South Africa (Prasa) train seen in Pretoria on 13 July 2015. Picture: Gallo Images / Alet Pretorius The Passenger Rail Agency of South Africa (Prasa) had initiated an independent forensic investigations into allegations of corruption in connection with two R18 billion tenders for train signalling equipment. The Hawks swooped in on Prasa's headquarters in Braamfontein on Wednesday afternoon, seizing laptops, mobile phones and a trove of documents of the rail agency's top executives and other employees. Forensic investigation Hawks spokesperson Brigadier Thandi Mabombo said the operation was conducted as part of an 'ongoing investigation.' Prasa spokesperson Andiswa Makanda said the Directorate for Priority Crime Investigation (Hawks) presented a search warrant for its Braamfontein offices. 'Prasa initiated an independent forensic investigation after receiving a submission from a Whistleblower. Documents and information related to this matter were secured through this proactive forensic investigation'. ALSO READ: Former Prasa head of security fails to get job back in 7-year legal battle 'Nothing to hide' Makanda said the information was 'readily available for sharing with the law enforcement authorities.' 'The Agency has nothing to hide and stands ready to provide complete cooperation to law enforcement authorities. The Agency will continue to implement robust governance measures and maintain the highest standards of accountability while fully supporting all legitimate investigative processes'. Fraud Senior officials at Prasa allowed two tenders amounting to almost R18-billion, to be awarded to a company, seemingly without the basic bid criteria being met, according to GroundUp. A report compiled by a whistleblower alleges Prasa had also fraudulently made advance payments to the company – Maziya General Services – amounting to almost R2.7-billion through five transfers during December 2023 and December 2024. The allegations are related to two tenders awarded to Maziya General Services. Tenders These are for a 'global system for mobile communications-railway redundancy network' in KwaZulu-Natal, Gauteng, and Western Cape (Bid 112), and a 'PRASA train control system' in KwaZulu-Natal (Bid 120). The tenders were published in November 2021 and October 2022 respectively. According to the report, the respective tender amounts awarded were R6.3-billion and R11.1-billion. Transparency The Chairperson of the Select Committee on Public Infrastructure and Minister in the Presidency, Rikus Badenhorst, said the allegations against the Prasa executives are concerning. 'This highlights a need for transparency and accountability within Prasa. The committee will monitor the developments at Prasa as it is important for the investigation to come to expose the alleged corruption within the entity'. Badenhorst called on the Minister of Transport, Barbara Creecy, to report back to the committee once investigations into the matter were complete, as the outcome was crucial to resolving one of the key obstacles hindering Prasa's progress on signalling. NOW READ: ConCourt sets date for MK party's case against Ramaphosa over Mchunu
IOL News
2 days ago
- IOL News
The great Steinhoff heist: R28bn later and nobody went to jail
Former Steinhoff chief executive Markus Jooste mysteriously died by suicide, leaving many questions unanswered. Jooste, resigned when PwC was appointed to investigate accounting irregularities. Image: Armand Hough/African News Agency (ANA) IN a decisive move that closes the chapter on one of South Africa's most infamous corporate scandals, Ibex Investment Holdings — formerly Steinhoff International — has sold its entire 28.48% stake in Pepkor Holdings for about R28 billion. The transaction not only marks the financial and symbolic end of the Steinhoff era but also signals a seismic shift in the country's retail and investment landscape. Steinhoff has spent years untangling the wreckage of the 2017 accounting scandal that erupted when auditors refused to sign off the group's financial statements. As the SA Reserve Bank (Sarb) noted in a statement released this week: 'The discovery of the now well-known accounting irregularities in the Steinhoff Group resulted in the immediate and sharp decline in Steinhoff's share price… eroding approximately 90% of the company's market capitalisation. 'This company crisis threatened the Steinhoff Group's continued existence and risked consequences, including forced asset sales or 'fire sales', significant losses to South African and foreign financial institutions and investors, and extensive job losses in South Africa and abroad. It also risked significantly affecting South Africa's reputation as one of the most robust and well-regulated financial markets in the world.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The fallout revealed irregular transactions totalling €6.5bn (R120bn), as uncovered by PwC's forensic investigation. The scandal triggered a cascade of regulatory probes, shareholder lawsuits, and a catastrophic loss of investor confidence across global markets. In 2023, Steinhoff officially rebranded as Ibex as part of its restructuring efforts to settle debts and salvage value. According to SARB: 'These processes resulted in the Steinhoff Group fully repaying over R28bn owed to South African banks in 2018 as well as compensation to other South African investors amounting to approximately R18.5bn as part of the global settlement.' The sale of its Pepkor stake, the last major asset in its portfolio, represents the final act in this protracted unwinding. Executed via an accelerated book-build, the shares were priced at R25.45 each, swiftly absorbed by investors. In its stock Exchange News Service (Sens) announcement, Ibex framed the sale as a strategic necessity: 'The divestment of the Pepkor stake is a critical step in concluding the legacy issues left by the Steinhoff financial irregularities. The proceeds will be used to further reduce debt and improve balance sheet strength.' While Ibex bows out, the Public Investment Corporation (PIC), Africa's largest asset manager, has deepened its commitment to Pepkor, increasing its stake from 14.91% to 15.46%. This vote of confidence comes as Pepkor reported a robust 23.4% surge in half-year net profit to about R3bn, driven by, among others, aggressive retail expansion across nearly 6 000 stores in Africa and beyond. The sale follows years of fraught litigation between Ibex and Sarb, which had frozen billions in Ibex's Pepkor shares. Courts eventually ruled the Sarb's actions legally unfounded, and a judicial order forced the release of the funds. Sarb stated: 'Beginning in early 2023, various disputes arose between the Ibex Group and the Sarb relating to administrative actions taken by the Sarb against Ibex Group companies arising from various alleged contraventions of the Exchange Control Regulations. 'One of these disputes involved the forfeiture for the benefit of the State of an amount of approximately ZAR6.3 billion, and others concerned blocking and prohibition orders issued by the SARB over funds and assets of the Ibex Group.' The final settlement saw Ibex forfeit R6.3bn plus interest to the state, a costly but necessary resolution to unlock the stake's sale. 'In coming to the settlement agreement and fully and finally resolving the disputes between them, the Sarb and the Ibex Group considered the public interest, the Sarb's mandate of enforcing the Exchange Control Regulations, and the importance of enhancing investor confidence in South Africa. 'R6.3 billion, plus interest, of Ibex Group funds was forfeited to the State in full and final settlement of the Sarb's enforcement action against the Ibex Group in relation to the Alleged Contraventions.' 'The Sarb has granted permissions to the Ibex Group to implement and take all steps that are necessary for the Ibex Group to implement its Dutch court-approved structured winding down process. The SARB has agreed not to take any further administrative or enforcement action against the Ibex Group in respect of the Alleged Contraventions,' read Sarb's statement. For Christo Wiese, the retail tycoon who built Pepkor and was once Steinhoff's largest shareholder, the transaction can be described as a somewhat bittersweet milestone. His fortune was decimated in the scandal's wake, and his resignation from Steinhoff's board marked the end of an era. The Steinhoff debacle exploded in December 2017 when the company abruptly delayed its audited results, sparking panic. The then chief executive, Markus Jooste, resigned when PwC was appointed to investigate accounting irregularities. The probe uncovered a vast fraud — R100bn in fabricated transactions dating back to 2009, designed to inflate profits and conceal losses. The revelations obliterated 97% of Steinhoff's market value and triggered global investigations. Jooste, who headed Steinhoff from 2000 until his resignation in 2017, has been widely identified as the orchestrator of the fraudulent schemes, along with a cohort of senior executives. The company's former chief financial officer, Ben la Grange, and directors Stephanus Johannes Grobler and Danie van der Merwe are charged with racketeering and fraud related to manipulating the financial statements with fictitious transactions totalling over R20bn. The National Prosecuting Authority's indictment described a 'systematic and organised' deception involving sham transactions with supposed third parties to fabricate income. Before the scandal fully unravelled, investigative financial research group Viceroy Research sounded alarms over Steinhoff's opaque financial dealings. Their reports scrutinised questionable accounting practices, off-balance-sheet entities, and suspicious related-party transactions, red flags that foreshadowed the looming storm. Reflecting on the resolution, Sarb stated: 'Both the Sarb and the Ibex Group consider the settlement reasonable, proportionate and justifiable in light of the complex and competing interests. Considering the long history of the Steinhoff/Ibex matter… the Sarb and the Ibex Group consider this final settlement to be in the best interests of South Africa.' Ibex's exit from Pepkor is more than a financial transaction; it is the closing act of a saga that exposed deep failures in auditing, governance, and regulation. While the PIC's renewed investment signals confidence in Pepkor's future, the Steinhoff scandal remains a grim reminder of corporate fraud's destructive power. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
The Citizen
2 days ago
- The Citizen
Reserve Bank and Ibex reach final settlement of R6.3 billion on Steinhoff fraud
Steinhoff imploded in December 2017 when the auditors refused to sign off on the financial statements due to irregularities. The South African Reserve Bank (Sarb) has reached a final settlement with Ibex of R6.3 billion after an extensive and complex investigation into the affairs of Steinhoff International Holdings and people or entities regarding possible contraventions of exchange control regulations. Ibex was formerly known as Steinhoff International Holdings. After its investigation, Sarb took administrative action against certain entities within and associated with the Steinhoff Group, because they did not comply with the exchange control regulations. The discovery of the now well-known accounting irregularities in the Steinhoff Group in December 2017 led to a sharp and immediate decline in the Steinhoff share price on both the Frankfurt and Johannesburg stock exchanges, eroding approximately 90% of the company's market capitalisation. ALSO READ: What we know so far about the secret PwC report on Steinhoff According to the Sarb the Steinhoff Group's external debt exceeded 10 billion euros (approximately R155 billion) at the time. The crisis threatened the Steinhoff Group's continued existence and risked consequences, including forced asset sales or 'fire sales', significant losses to South African and foreign financial institutions and investors and extensive job losses. There was also a risk that it could significantly affect South Africa's reputation as one of the most robust and well-regulated financial markets in the world, Sarb points out. Steps to restructure Steinhoff debt Complex multi-jurisdictional debt restructuring and settlement processes were implemented between 2018 and 2023 to prevent an uncontrolled liquidation and mitigate the financial distress facing the Steinhoff Group. These processes resulted in the Steinhoff Group fully repaying more than R28 billion owed to South African banks in 2018, as well as compensation to other South African investors amounting to approximately R18.5 billion as part of the global settlement, that involved a total settlement value of approximately R29.6 billion at the time and was approved and sanctioned by international and local courts. ALSO READ: Almost R67 million from Steinhoff accused forfeited to the state The Sarb says the Public Investment Corporation (PIC) was one of the main beneficiaries of the global settlement due to its investment in the Steinhoff Group. South African creditors and banks were able to exit and recover all or most of their money, as foreign creditors agreed to a restructuring of their debt and a deferral of their rights. According to the Sarb, these foreign financial creditors granted forbearance of their claims against members of the Steinhoff Group, ultimately to 30 June 2026, to enable the settlement of various other creditors, who were mainly South African, first. Disputes between Ibex and Sarb Various disputes arose between the Ibex Group and the Sarb in early 2023 regarding the Sarb's administrative actions against Ibex Group due to various alleged contraventions of the exchange control regulations revealed by the investigation. The Sarb says these disputes resulted in multiple legal proceedings between the parties, including the intervention of at least one of the Ibex Group's financial creditors. One of these disputes involved the forfeiture of an amount of about R6.3 billion for the benefit of the state, while others concerned the Sarb's blocking and prohibition orders over the Ibex Group's funds and assets that arose as part of the investigation. In line with legal advice and after careful consideration by the Sarb, all the disputes between the Ibex Group and the Sarb were ultimately resolved in a comprehensive settlement. ALSO READ: NPA secures first conviction and sentence in Steinhoff fraud case The Sarb says In concluding the settlement agreement and fully and finally resolving the disputes between them, the Sarb and the Ibex Group considered the public interest, the Sarb's mandate to enforce the exchange control regulations and the importance of enhancing investor confidence in South Africa. They also wanted to promote regulatory certainty by allowing the Ibex Group to settle its contractual obligations to its foreign financial creditors. 'In fulfilling these aims, the Ibex Group forfeited R6.3 billion plus interest of its funds to the state in full and final settlement of the Sarb's enforcement action against the Ibex Group regarding the alleged contraventions,' the Sarb says. Ibex granted permission to wind down and repay creditors In return, the Ibex Group withdrew its legal challenge to the forfeiture. In addition, the Sarb granted the Ibex Group permission to implement and take all steps necessary for the Ibex Group to implement its Dutch court-approved structured winding down process and repay its creditors and operational expenses. By agreement between the Sarb and Ibex Group, the High Court set aside the prohibition orders restricting the Ibex Group's ability to deal with some of its shares in Pepkor Holdings Limited and the Sarb agreed not to take any further administrative or enforcement action against the Ibex Group regarding the alleged contraventions. In addition, the Ibex Group and the Sarb, with the support of the majority of the Ibex Group's current creditors, withdrew all the litigation they instituted, while the Ibex Group and the financial creditors abandoned the judgments obtained in the course of the litigation. 'The Sarb as well as the Ibex Group consider the settlement reasonable, proportionate and justifiable considering the complex and competing interests. 'Considering the long history of the Steinhoff/Ibex matter, the wider ramification of the continued dispute between the Sarb and the Ibex Group for investor appetite for future investments in South Africa and the interests in finality, the Sarb and the Ibex Group consider this final settlement to be in the best interests of South Africa,' the Sarb says.
