The Financial Sector Conduct Authority (FSCA) has concluded its investigation into the Steinhoff Group, and has found that it contravened sections of the Financial Markets Act.
In the period prior to the discovery of significant accounting irregularities at the company in December 2017, the FSCA found that Steinhoff made false, misleading or deceptive statements, promises or forecasts in its public statements to the markets.
“The FSCA has applied section 109 of the FMA 2012 to determine the level of administrative penalty to be paid by Steinhoff and, having considered representations from the company, has also taken into account a number of mitigating factors,” it said.
“The FSCA has imposed an administrative penalty of R1.5 billion on Steinhoff under section 81 of the FMA 2012.”
However given a number of factors – including Steinhoff’s current financial position and to avoid penalising innocent shareholders further – the FSCA said that it would remit a portion of the administrative penalty resulting in Steinhoff only paying R53 million.
“The FSCA states that events subsequent to December 2017 have highlighted the gap that existed between the Steinhoff Group’s prior public statements and the financial reality.
“The size of the headline penalty reflects the scale and severity of the regulatory breach,” the FSCA said.
“While, in light of Steinhoff’s current financial position, we have made the decision to remit a substantial proportion of the penalty, even after this reduction it remains the largest single fine ever imposed by the FSCA.
“We would like to thank the current Steinhoff management team for their co-operation and constructive engagement through this difficult and complex process.”