STEINHOFF Reinkarnation

www.citizen.co.za/business/...s-off-market-who-made-billions/

As Steinhoff limps off the market, here?s who made billions

Shareholders forced to the back of the queue and, bar a token settlement, will walk away with nothing ?Over this time, however, the executives in charge of trying to rescue the company were paid handsomely for their efforts.

Steinhoff CEO Louis du Preez has been paid a total of ?15.5 million in the last five financial years (2023 excluded). This equates to R266 million at the respective average exchange rates.

In the days following the ?events of December 2017? as the group terms it, Du Preez was paid ?482 000 (R7.5 million) in strategic and retention bonuses.

He was appointed acting commercial director in December and was confirmed in that role in April. From 1 January 2019, he assumed the role of CEO.

CFO Theodore de Klerk (who acted as COO until his appointment as CFO on 1 September 2019) has been paid a total of ?11 million (R198 million). Prior to his appointment, Philip Dieperink was CFO.

In all, the four executives in the CEO and CFO roles subsequent to the collapse have been paid over R600 million. This is the sum total of the management board and excludes other ?key management personnel?.

This number pales into insignificance when compared to the fees paid to auditors over the five years. It took about two years to restate prior accounts, at a cost of ?75 million, or over R1 billion.

Audit fees

In the first year, the cost of this amounted to ?117 million, or nearly R2 billion. In 2019, it peaked at ?158 million (R2.5 billion). The spending has moderated, but the current run rate is still around ?30 million (close to R500 million).

theolddog.co.za/a-heartbreaking-story-steinhoff/

In the five years since ?the events?, Steinhoff has paid forensic accountants, lawyers and advisors a total of ?447 million, or R7.5 billion. It includes more than R500 million spent in the financial year?s first half (?29 million). Auditors, advisors and the top two executives have been paid over R10 billion since December 2017.And these fees continue to rack up.

Audit fees have moderated in the years since, but the total bill for audits since the 2018 financial year is ?128 million, or R2.1 billion.

PwC Report

Even this looks cheap when compared to the amounts paid to various firms for the ?forensic investigation [PwC], advisory and restructure of the business?.

In 2018, it said ?it has been necessary for the group to engage with a wide range of professional advisors, to assist the group with its investigative, legal, financial and regulatory requirements, as it seeks to stabilise and restructure the group?.

?The scale and complexity of this task has meant that the aggregate advisor costs for the reporting period have been substantial,? it added.

?The principle advisor relationships included legal advisors, financial restructuring and corporate advisory functions that support the Group on discussions and engagement with its creditors, liquidity management and operational measures, forensic investigation services and regulatory and taxation advisory services.?

In addition, it explains, ?as part of the restructuring process the Group is required to pay the advisor costs of each of the respective creditor groupings including legal advisors, financial structuring advisors and regulatory and taxation advisors?.

In the first year, the cost of this amounted to ?117 million, or nearly R2 billion. In 2019, it peaked at ?158 million (R2.5 billion). The spend has moderated but the current run-rate is still around ?30 million (close to R500 million).

In the five years since ?the events?, Steinhoff has paid forensic accountants, lawyers and advisors a total of ?447 million, or R7.5 billion.

This includes more than R500 million spent in the first half of the current financial year (?29 million).

In all, auditors, advisors and the top two executives have been paid over R10 billion since December 2017. And these fees continue to rack up.

What?s that saying ? ?Heads I win, tails you lose??

Stay tuned! Best regards.