Business Leadership South Africa says big businesses should adhere to the code of business ethics or face the consequences as the fallout from the Steinhoff accounting fiasco continues.
There has been widespread condemnation from various business sectors and unions in the wake of international retailer Steinhoff revelations of accounting irregularities. Many business groups are calling for business organisations to distance themselves from corrupt companies. Business Leadership South Africa (BLSA) says it is disappointed and disgruntled by Steinhoff’s recent allegations. It says this makes big business look bad.
German officials have been investigating alleged dodgy accounting at Steinhoff for close to a year.
The furniture retailer lost more than 60% of its stock value on Tuesday and around 30% of the remaining value on Thursday.
Steinhoff is listed in Johannesburg and in Frankfurt, Germany.
Steinhoff International continued to remain on the red in the wake of its recent allegations. Although the company moved to reassure investors their share price continued to tumble by more than30 per cent. Maudi Lentsoane is a market analyst from LEHUMO investments
“The sell-off is continuing to be under a lot of pressure down 37 percent its another red day for Steinhoff unfortunately because even though the company came out and said they had quantified the amount of the damage saying they have a shortfall of six billion Euros the market is not buying that, the market is not buying tha because there just hasnt been any finalisation or details in regards to what happened and I think that is what the market is looking for and the investigation to be finalised before the market can really calm down.”
Analysts are also questioning why auditing firm Deloitte failed to raise red flags on Steinhoff International financials.
“Even though Deloitte which is there auditor failed to approve and sign off these financials for 2017/2018 the fact of the matter is that previously they would have signed them off. I don’t think these problems started this year these problems a couple of years ago and these problems have always been there. So the question is what happened with the previous financials why did they sign off those financials where they in a position to tell that there were problems or they simply said they are not going to sign off these ones because KPMG is in the sport light or because the auditing industries are in the spotlight.”
Meanwhile Business Leadership South Africa (BLSA) says big businesses should adhere to the code of business ethics or face the consequences CEO Bonang Mohale has warned that they will terminate the membership of any company that does not comply with its integrity pledge.
“Members must comply and if they don’t they tarnish the rest of the business. That is why we were quick to suspend the membership of KPMG followed by Eskom and Transnet.”
TEXT- Corruption Watch has condemned the conduct of Steinhoff. The organisation says it will continue to monitor the outcome of the investigations. Corruption Watch David Lewis
“The business Association needs to distance themselves from both Steinhoff and Naspers business is not to be tainted with the same brush that they now have been tarred and a JSE investigation is necessary certainly in the light of Steinhoff case is necessary and I would expect that they would be doing so already.”
The Public Servant Association says it has had a meeting with PIC and that government pension funds are safe, however members of the fund have lost more than 12 billion Rands and this figure could raise, Spokesperson Tahir Maepa.
“We were more on a fact finding mission to try and find out the effects of this scandal and if the 12 billion was the only amount that will basically be the loss so far we don’t know the extent of this scandal and the extent of the losses and PIC has reassured as that they are engaging Steinhoff. This thing is not normal there is a lot of unbecoming corruption. No further money should be invested elsewhere until such a time we are given a role to play an oversight at the PIC.”
The association says it will be laying criminal charges against Steinhoff.
“We cannot have these levels of corruption both in private and public sector seem to be rampant it’s like free for all now and this is quite disturbing for us as an organisation. The 12 billion is not going to encircle the possibility of our embers losing their money, but however we cannot sit and hope that there won’t be any other scandal.”
FEDUSA has called on the Johannesburg Stock Exchange (JSE) to strengthen its compliance mechanisms to prevent irregularities from the private sector. FEDUSA says there is a need for stringent ethical governance that all companies in the JSE need to comply with.
