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Finance Minister Malusi Gigaba, will meet with various stakeholders on Friday to discuss the Steinhoff debacle.
The JSE was down sharply last week as scandal engulfed one of the country's biggest shares on the exchange.
Steinhoff International shares plunged after the company’s auditors refused to sign off on its latest financial statements and shortly after its chief executive resigned.
Before its collapse, Steinhoff was the seventh biggest company in the FTSE/JSE Shareholders Weighted Index, the benchmark widely used by professional investors, with a 2.3% weight.
Ratings agency Moody’s reacted to reports of the scandal by downgrading Steinhoff by four notches from the last rung of investment grade to four notches into “junk” status.
A number of other listed companies closely associated with Steinhoff and chairman Christo Wiese also suffered sharp declines to their investments.
READ: Steinhoff hits junk as R282bn in value is lost
Parliament’s portfolio committee on public service and administration said earlier this week that public servants’ pension funds had been involved in the Steinhoff scandal and suggested that members of the Government Employees Pension Fund could lose about R12.5-billion in investments.
Last week, Gigaba indicated his support for the decision by the Financial Services Board to institute an independent probe into the accounting irregularities at Steinhoff.
“Considering the recent call for corporate South Africa to provide accurate reporting of its financials, the minister will also have discussions with other appropriate regulators, such as the Independent Regulatory Board for Auditors, to assess any likely lapses in financial and auditing reporting.”
The JSE, which has also been invited to the meeting with Gigaba, has also launched a probe into Steinhoff.
Steinhoff started out in South Africa in the 1990s, and aggressively expanded to other parts of the world, especially Europe.
It is not immediately clear if outright fraud is involved, but German prosecutors (the company is also listed in Frankfurt) said they were also investigating possible accounting irregularities and fraud.
A Steinhoff spokesperson said in an email reply to City Press Business editor Justin Brown last week that the company was not in a position to provide any additional information other than that available to the public through the Stock Exchange News Service.
The Standing Committee on Public Accounts (Scopa) has called for accountability and for urgent, firm and decisive action to deal with the wrongdoers.
“This crass greediness of senior executives in the private sector is an indicator of the pervasiveness of immoral conduct among South Africa’s elite. Parliament cannot be a spectator in this unfolding drama, as the laws of the country, ethical conduct and workers’ pensions go down the drain because of the recklessness and corruption of the super-rich,” the chairperson of Scopa, Themba Godi, said earlier this week.
READ: Could Steinhoff derail SA’s mild economic upswing?
Other stakeholders invited to the meeting with Gigaba include: the CEO Initiative, Manufacturing Circle, the Government Employees Pension Fund, Public Investment Corporation, South African Revenue Service, Financial Service Board, and the Independent Regulatory Board for Auditors.
The Public Investment Corporation, which invests money on behalf of government workers and pensioners, and private sector fund manager Coronation are both major Steinhoff shareholders.
Coronation owned 5% of Steinhoff shares in September last year.
Its share price fell by as much as 10% this week on the back of the revelations about the Steinhoff scandal.
Louise Pelser, spokesperson for Coronation, did not respond to questions sent by City Press regarding the company’s stake in Steinhoff, held on behalf of the asset manager’s clients.
The Public Investment Corporation has a 10% stake in Steinhoff.
Its spokesperson, Deon Botha, said: “Allegations of accounting irregularities by Steinhoff ... that have exposed the company to possible criminal investigations, are serious concerns for the corporation.”
The Government Employees’ Pension Fund said it owned 10% of Steinhoff via the Public Investment Corporation, and added that this stake represented 1% of its total assets.
“The impact of the movement in the share price on the fund is significant, but manageable,” it said.
The meeting will be held behind closed doors at the JSE but Gigaba will address the media once the meeting is concluded.
