A Battle for Access to Information Sheds Light on Steinhoff International’s Corporate Fraud
In December 2017, the world was shaken by the corporate fraud scandal involving South African retail giant Steinhoff International and its former CEO Markus Jooste. The aftermath of the scandal left investors devastated and the company’s secrets buried deep within the confines of confidentiality. While we may think we know the story, much remains undisclosed.
The revelation of accounting irregularities, Jooste’s resignation, and the subsequent 98 per cent drop in Steinhoff’s share price caused an estimated R200-billionSte loss to shareholders, including the Government Employees Pension Fund. As South Africa’s largest corporate fraud, the collapse of the groupraised numerous questions about how it happened and who else was involved.
PwC conducted the most extensive investigation into the scandal, but the company only released an eleven-page overview of their 7,000-page report. Trusting company claims about the report’s contents is impossible, and understanding the full scope of Jooste’s actions within the company becomes a daunting task without access to the complete report.
To shed light on the unfathomable losses suffered by the public, AmaBhungane and the Financial Mail joined forces and sought access to the PwC report through the Promotion of Access to Information Act (PAIA). Of course, Steinhoff vehemently opposed the requests on the grounds of legal privilege.
No Steinhoff International!
However, the Western High Court ruled against the group, emphasizing the crucial role of access to information in accurate reporting and public knowledge. The furniture retailer received a court order to grant access to the report within 10 days. In response, Steinhoff swiftly filed an appeal against the decision, pausing their obligation to provide access temporarily.
Since then, Steinhoff has devised innovative excuses to deny access to the report. They first claimed that Dutch and European Union data privacy laws applied because the company was registered in the Netherlands. Later, they extended this argument to include UK data privacy laws due to their descendant company’s registration in the United Kingdom.
Undeterred, journalists battling for transparency enlisted the help of a European data law expert to disprove Steinhoff’s interpretations of the law. According to this expert, the foreign privacy laws cited by Steinhoff should not prevent the report’s disclosure in South Africa.
Steinhoff’s staunch resistance to granting access to the report highlights their disregard for journalistic freedom and the vital role the media plays in exposing corporate crimes. Access to information and data privacy laws in various jurisdictions explicitly recognize the importance of providing journalists with access to information for investigative purposes.
From a constitutional standpoint, the right to access information is protected by South Africa’s Constitution and the PAIA. Courts have confirmed that journalists seeking access to information trigger this right, especially when it serves the public interest and reveals substantial infringements of the law.
In this case, with countless citizens and pensioners severely impacted by Steinhoff’s fraudulent activities, media investigations are crucial to uncovering the truth. As criminal prosecutions against Jooste are yet to be pursued in South Africa, it falls upon journalists to investigate how Steinhoff managed to defraud investors for such an extended period.
The Supreme Court of Appeal is set to hear Steinhoff’s appeal in the coming months, marking the next chapter in the ongoing battle to reveal the complete story behind the Steinhoff implosion. As we await the court’s decision, let us hope that the truth will finally prevail, and those responsible for this devastating corporate scandal will be held
