FSCA fines Steinhoff R1.5bn
The Financial Sector Conduct Authority (FSCA) has imposed an administrative penalty of R1.5 billion on Steinhoff under Section 81 of the FMA 2012 – the highest penalty to date issued by the authority.
In a news release on its website, the FSCA said it noted Steinhoff’s current financial position and in order to avoid penalising innocent Steinhoff shareholders further, in recognition of the fraud perpetrated on the Steinhoff Group by former employees and officers of the Company, and in acknowledgement of the co-operation of management to date and Steinhoff’s commitment to continue co-operating fully with the FSCA in all future actions taken against any persons allegedly responsible for the wrongdoing, the authority would remit a portion of the administrative penalty, resulting in Steinhoff paying a penalty of R53 million.
The FSCA said events subsequent to December 2017 highlighted the gap that existed between the Steinhoff Group’s prior public statements and the financial reality. “The size of the headline penalty reflects the scale and severity of the regulatory breach. While, in light of Steinhoff’s current financial position, we have made the decision to remit a substantial proportion of the penalty, even after this reduction it remains the
largest single fine ever imposed by the FSCA.”
The Steinhoff Group was investigated for contraventions of the Financial Markets Act No 19 of 2012 (FMA 2012) following the discovery of significant accounting irregularities at the company in December 2017. The FSCA investigated three key areas relating to the Financial Markets Act, namely
- insider trading;
- the presentation of false information; and
- price manipulation.
Steinhoff, as a legal entity, was found guilty of publishing false information to the market regarding its financial statements.
According to a report on FA News, the FSCA will be investigating the key role players in the Steinhoff saga in their private capacity. The regulator hopes to finalise these investigations within the next eight to eighteen months.