Mazars set to replace Deloitte as Group Auditor for Steinhoff
As South African retail giant Steinhoff International looks to rebuild its operations, the firm is looking to terminate its association with Deloitte, which was its Group Auditor when scandal broke out in 2017. Steinhoff’s board has nominated accounting and advisory firm Mazars as the potential new candidate.
Steinhoff and Deloitte both found themselves in the limelight late in 2017, when more than $6 billion in assets were misreported in the retail giant’s books. Steinhoff – which up until then was the largest retail company in South Africa – suffered a massive blow to its operations.
85% of Steinhoff’s market value disappeared overnight, and the firm terminated relations with senior officials involved in the incident. Big Four accounting and advisory firm PwC was subsequently appointed to investigate the incident, and came back with a report earlier this year that placed the value of fraudulent accounts at approximately $7.5 billion.
Two years on from the scandal, as Steinhoff looks to rebuild its profile, the firm is starting with dissociating itself from Deloitte. At a general stakeholder meeting in Amsterdam, Steinhoff’s board announced that it was considering Mazars as a replacement for Deloitte as Group Auditor.
According to the board, the new appointment will be put to a vote amongst shareholders at an extraordinary general meeting (EGM). Senior officials at Steinhoff have expressed the importance of the move for the firm’s reputation, and are anxious to push it through at the earliest possible date.
“We have 42 days to give investors notice of an EGM, where investors have the right to vote to approve the Mazars nomination. Time is ticking, and we have to get the process moving,” said Heather Sonn, Steinhoff Chairperson. Others have been skeptical regarding the move, and are questioning its validity.
“This is a surprise announcement, and we are disconcerted,” said VEB Group, a Dutch investment company with a stake in Steinhoff. VEB has previously launched legal action against Steinhoff due to plummeting market value, which resulted from admission to malpractice in 2017.
