White collar crime is a serious challenge for the country

As Steinhoff makes his way to the still distant finish line, it’s hard not to feel some respect for the tenacious leaders who have spent much of the past four years in the equivalent of a body war. hand-to-hand with a variety of aggrieved investors. .

Of course, it helps that all that hard work is paying extremely well. This means that executives win no matter what. This is not the case with shareholders for whom “winning” only means losing a little less.

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Of course, the biggest winners in all of this will be the financial creditors who got Steinhoff loans at a fraction of their face value after the December 2017 announcement of accounting irregularities at the company. They are not only ready to get 100c on the rand when things are finally settled, but in the meantime they get 10% interest every year. This extremely generous interest payment is built into the initial € 9 billion, which presumably means the loan now exceeds € 11 billion.

Read:

Wiese backs court settlement as Steinhoff claimants vote
Steinhoff moves closer to settlement after securing more support

As it stands, the biggest threat to the finalization of the Section 155 plan of arrangement appears to be the liquidation request filed by the founders of Tekkie Town led by Braam van Huyssteen and Bernard Mostert.

While it seems unlikely that they’ll be able to sidetrack things, they could definitely delay resolution. Van Huyssteen and his co-founders announced that they were opposing the South African court’s request to sanction the crucial Section 155 plan of arrangement. However, given that the program received 100% support from creditors, it’s hard to see how the court wouldn’t approve it.

It is also difficult to imagine that the Constitutional Court will interfere.

Steinhoff apparently approached our highest court in an attempt to postpone the Western Cape Court hearing on Van Huyssteen’s liquidation claim. A swift and favorable (for Steinhoff) decision of the Constitutional Court would ensure the high court’s approval of the Article 155 regime. This approval would remove any legal threat from Steinhoff’s creditors.

The risk for Steinhoff is that if the liquidation request is successful, the liquidator obtains control of the company and retains that control even if Steinhoff appeals the liquidation decision.

It is likely that Steinhoff is particularly keen to ensure that the infamous PwC report is not exposed during a possible liquidation process; such a disclosure would spark all kinds of antagonism and legal action.

However, although white-collar crime is a serious challenge for the country, it might not be seen as of sufficient constitutional interest to warrant urgent intervention by the Constitutional Court.

Listen to Moneyweb editor Ryk van Niekerk’s interview with Christo Wiese below (in Afrikaans) or read the English transcript here.

JCI Limited

On a more prosaic note and just to prove that the wheels of justice and regulation are slowly turning, earlier this month the Corporations and Intellectual Property Commission (CPIC) won a lawsuit against JCI Limited.

Most investors may have forgotten about JCI, but in its day – well, especially from the mid-1990s onwards when it was the subject of an Anglo-American unbundling / BEE exercise – it was almost as controversial as Steinhoff has become.

It appears that CPIC inspectors found that for the period 2011-2017, JCI did not prepare audited financial statements as required by the Companies Act.

After initially seeking to have the CPIC notice of compliance rescinded, JCI admitted that it was unable to prepare financial statements as required by the Companies Act.

In terms of the settlement agreement reached with CPIC, JCI must now pay an administrative fine of R 1 million and call a meeting of shareholders to pass a special resolution for the voluntary liquidation of JCI Limited.

African rainbow capital

Speaking of BEE, it looks like Patrice Motsepe, Johan van Zyl and Johan van der Merwe were the main BEE tycoons at the start of the 21st.st Century.

The main players behind African Rainbow Capital (ARC) seem to be able to close any deals they want.

It’s quite astonishing that thanks in large part to ARC’s acquisition of a stake in Sanlam Investments last year, the number of assets managed by black-owned fund managers nearly doubled. In June 2021, black-owned businesses managed 1.15 trillion rand, up from 667.8 billion rand a year earlier. Sanlam Investments accounted for R344 billion of the increase.

Read: Challenging the valuation of Rain

Sasol

Meanwhile, Sasol’s determination not to take a “big bang” approach to carbon emissions is not going to win him friends in the environmental activist community.

The company, which is South Africa’s second-largest greenhouse gas emitter, has tripled its “aspiration to reduce emissions by 2030” and is putting in place plans to transform the group by 2050.

Tripling aspirations seems quite exhausting and also remarkably vague.

Perhaps all executive bonuses should be suspended until these aspirations make a tangible appearance in the operation of Sasol.

Read: Sasol is preparing for its future

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