Following 14 months' of forensic investigation, advisor PwC has delivered an overview of its findings regarding financial irregularities at Steinhoff International.
PwC reports that a small group of former executives and other non-Steinhoff executives, led by a senior management executive – none of which remain employed by the group – implemented various transactions over a number of years which resulted in substantially inflated Steinhoff's profit and asset values.
In many cases, says PwC, fictitious and/or irregular income was created at an intermediary holding company level, then allocated (often as cash) to underperforming Steinhoff operations. These transactions involved many entities over a number of years, and were supported by documents that, in many instances, were created after the fact and backdated.
The group is documenting and developing a remediation plan, some of which has already been put into place.
Steinhoff is still preparing financial statements, including restated financial statements for 2016, which take the findings of PwC's report into consideration.
