Steinhoff Executives Charged With Multi-Billion Euro Fraud: A Financial Crime Investigation

On February 14, 2025, two suspects appeared in the Pretoria Specialised Commercial Crimes Court on charges of violating the Prevention of Organised Crime Act 21 of 1998 (POCA), section 81 of the Financial Markets Act 12, section 71 of the Companies Act, and section 34 of the Prevention and Combatting of Corrupt Activities Act 12 of 2004 (PRECCA).

The two suspects, aged 63 and 67, turned themselves into members of the Hawks’ Serious Commercial Crime Investigation in Pretoria on the morning of February 14, 2025. Their arrests were linked to an ongoing investigation into fraudulent activities at Steinhoff International Group.

Allegations of Fraudulent Activities

The investigation discovered that Steinhoff’s auditors declined to approve the company’s 2016 annual financial statements between October and November 2017. Steinhoff then disclosed accounting irregularities, forcing a further investigation by an independent auditor, resulting in the company’s refusal to present its annual financial statements.

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It is alleged that the suspects, who had executive positions at Steinhoff, created bogus transactions worth 6.5 billion euros (R197 billion), affecting the share indexes on the Johannesburg Stock Exchange (JSE) and Frankfurt Security Exchange (FSE).

This financial fraud attracted many investors, who experienced huge losses after buying Steinhoff’s stock. Steinhoff reportedly submitted false and misleading financial statements between 2014 and 2016.

Impact on Investors and Market

When allegations came up in 2017, Steinhoff’s stock collapsed, creating major losses for shareholders. The estimated financial loss to investors is approximately 6.5 billion euros. Investigations suggested that a small number of Steinhoff executives had been doing things over several years to inflate the company’s profit and asset value.

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Ongoing Investigation

The Hawks are continuing their probe into the situation. Hein Odendaal, 67, a chartered accountant and former managing director of Steinhoff affiliates, and Iwan Schelbert, 63, a long-time director at the multinational, have been named as the suspects.

They, along with former Steinhoff executive Stephanus Grobler, are set to appear in court in May. Odendaal and Schelbert are both released on R150,000 bail. The Steinhoff scandal nearly bankrupted the global retailer in 2017.

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