Steinhoff terminates temporary consulting relations with CFO and Director

After a few months of continued but limited association with former CFO Ben la Grange and former Director Stehan Grobler, South African retail giant Steinhoff International has terminated their relationship with both executives. The move comes in light of the firm’s drop from heavy expansion to near bankruptcy late last year.

Towards the middle of last year, anyone who had glanced at Steinhoff International’s position would have seen nothing but promise. The firm registered revenues of over $13.5 million for 2016, with operations spanning 6,500 retail outlets and brands across the world, making its South Africa’s largest retailer by a considerable distance.

The firm was also ranked by Big Four professional services firm Deloitte as the 68th largest retailer in the world, due to make its way up the rankings through further expansion strategies. Late last year, however, it came to light that the firm had overstated revenues and profits on their balance sheets, and misreported over $6 billion in assets.

Confidence in Steinhoff’s operations dropped immediately, causing a drop of nearly 90% in market value and leading to large-scale investigations. The outcome was the provisional suspension of two of the firm’s top executives – CFO Ben la Grange and Director Stehan Grobler.

Both were retained in a consulting capacity for a temporary period to ensure maximum stability in a time of transition, but the firm has now announced the termination of relations with both executives. La Grange, in particular, was responsible for the finance function of Steinhoff at the time, and was due to appear before the South African parliament this week.

For support during this tough period, Steinhoff has been relying on services from the consulting industry. Big Four accounting and advisory firm PwC, for instance, has been tasked with investigating the entire affair, and is expected to present a report by the end of this year.

Earlier this year, Steinhoff pulled KPMG-veteran and former Global Head of Restructuring Richard Heis out of retirement to act as its chief restructuring officer. Heis has over three decades of experience in the field of insolvency. Big Four professional services firm Deloitte, meanwhile, is also facing a barrage of lawsuits, given its position as auditor of Steinhoff.

Commenting on the release of la Grange and Grobler, a Steinhoff spokesperson elaborated," Ben la Grange and Stehan Grobler (the latter via Hoffman Attorneys) have been on short-term consultancy arrangements since the beginning of the year. As part of the group’s ongoing investigation the group has decided to suspend these consultancy arrangements.”