In 2020, Steinhoff offered R30 million to the NPA to help with its forensic investigation to be performed by PwC.
THE NATIONAL Prosecuting Authority (NPA) has announced that while it supports the forensic probe into furniture retailer Steinhoff it did not receive any funds.
The forensic investigation was conducted by auditors PricewaterhouseCoopers.
NPA spokesperson Sipho Ngwenya said the funding of the forensic investigation falls squarely within the domain of the South African Police Service.
“It is accepted practice locally and internationally for complainant companies to commission these kinds of forensic exercises and the NPA can use the findings appropriately to prepare any possible prosecutions,” he said.
Steinhoff allegedly overstated profits over several years in a $7.4 billion ( about R111.9 billion) accounting fraud involving a small group of top executives and outsiders.
Last week, the NPA came under fire for accepting funds from Steinhoff for its investigation. The Economic Freedom Fighters condemned the NPA, citing a conflict of interest.
In 2020, Steinhoff offered R30 million to the NPA to help with its forensic investigation to be performed by PwC.
Ngwema said after Mark Jooste’s resignation in 2017, Steinhoff appointed PwC to investigate the full extent of the suspected accounting irregularities.
“It took PwC almost two years to finalise the report, whereafter Steinhoff granted the Hawks and the NPA access to the PwC report,” he said.
Ngwema said, while the PwC report was accounting-driven and not primarily focused on criminality and the criminal court process, PwC also released a separate forensic report which was court-ready. “It dealt fully with one fictitious transaction in connection with one (1) leg of the investigations.”
Ngwema said the appointment of PwC was supported by the NPA and the Hawks because the auditors had accumulated significant knowledge of the Steinhoff matter over the two years of their investigation.
“They were in an ideal position to produce a forensic audit report for criminal investigation and prosecution within a reasonable period, notwithstanding what might be perceived as a conflict,” he added.
Ngwema said some disadvantages were taken into account should PwC not be appointed as auditors for the probe.
“Forensic investigation of this complex matter would, for all practical purposes, have to start afresh by the new forensic firm. It would take years for the new forensic firm to obtain all relevant documents and to familiarise themselves with the facts,” he said.
Ngwema added that the probe is intricate and costly, spanning across borders into various international jurisdictions.
He added that there were measures in place to prove that the appointment of PwC is not a conflict of interest.
“PwC signed a certificate in terms of section 4 of the Protection of Information Act, No 84 of 1982. This is protecting any unlawful disclosures of any confidential information/documentation during the forensic investigation,”
“All the implicated persons have been removed from Steinhoff structures, including executive, and/or board positions; PwC’s findings will be supported by independent objective evidence such as bank statements, journals, ledgers, data basis, emails, memo’s and contractual agreements.”
“PwC made an undertaking, and also taking into consideration the consequences which would arise from a breach to the section 4 (POPIA) certificate, that no evidence obtained during the criminal investigation will be divulged to Steinhoff, even for civil litigation,” he said.
The probe into Steinhoff’s financial misdealing is two-fold, with the other part being conducted by German authorities.
– BUSINESS REPORT
