South Africa

COUNTER-CORRUPTION SUMMIT

Pigmentation has nothing to do with lack of progress in Steinhoff case – Investigating Directorate

Pigmentation has nothing to do with lack of progress in Steinhoff case – Investigating Directorate
Head of the Investigative Directorate, advocate Andrea Johnson. (Image: Screenshot)

In an op-ed published this week, Cabinet Minister Lindiwe Sisulu suggested that the reason the masterminds responsible for Steinhoff’s collapse have not been arrested is due to their ‘pigmentation’. At a counter-corruption summit on the same day, Investigating Directorate head Andrea Johnson said the delays in the Steinhoff matter were attributable to a severe shortage of the technical skills necessary to pursue these complicated financial cases.

A scarcity of talented criminal investigators, forensic investigators and financial prosecutors is drastically impeding South Africa’s ability to ensure financial fraudsters are held to account.

Investigating Directorate (ID) boss Andrea Johnson told the Pavocat-Stellenbosch Academy Counter-Corruption Summit this week that local skills in these areas are “seriously lacking”.

Johnson said the inevitable result was delays in prosecuting complex financial cases such as the collapse of retailer Steinhoff. South Africans have been waiting for signs of progress on bringing Steinhoff bosses to account since December 2017, when CEO Markus Jooste resigned amid evidence that the company’s top executives had lied about its profits and assets.

The delays in the Steinhoff matter have caused many South Africans to speculate that Jooste and his cronies are being given more generous treatment than other suspected fraudsters because they are white.

Cabinet Minister Lindiwe Sisulu reiterated this theory in an op-ed published on IOL on Wednesday. Sisulu wrote that Steinhoff’s “accomplished fraudsters whose sins are passed off as ‘accounting irregularities’ ” manage to evade arrest “because of their pigmentation”.

Johnson did not mention Sisulu’s op-ed in her comments at the counter-corruption summit, but said she was aware of the theories in circulation.

“Unfortunately, the perception is out there that it is easier [for law enforcement] to deal with black individuals and black-owned entities rather than white-owned entities and white individuals,” Johnson said.

“But it’s not about the colour. What it’s about is the extent of the corruption, the levels at which it took place, the period over which it took place, the sophistication with which it happened and the time and resources required to actually uncover the scheme that was Steinhoff. It is not an easy matter.”

Johnson said that when law enforcement agencies try to build cases of this nature, they run up against the problem of the small size of the talent pool available — in terms of the tiny number of investigators and prosecutors with the relevant financial knowledge and experience.

“Here’s the travesty: we are all fishing in the same gene pool for the same resources: the ID, the Hawks, SAPS, SARS … any law enforcement in the country,” Johnson said.

An additional problem is that the relevant individuals are ageing, without the necessary “new growth” in the development of these skills in the next generations.

The ID boss suggested that universities should step up to try to help address this skills deficit by producing graduates able to take on these complex prosecutions.

“Our [university] programmes are unfortunately too academic,” Johnson said.

Orange overalls not the only answer — NPA

At the same summit, National Prosecuting Authority Deputy Director Anton du Plessis suggested that the public preoccupation with seeing State Capture perpetrators behind bars reflected a limited approach to the problem.

“There is this mantra in South Africa that we are not going to solve our problems until we see people in orange overalls,” Du Plessis said.

“I think that is perhaps too narrow a view to take. [Prosecutions are] a fundamental component to the response, but it could be a red herring.”

Du Plessis warned that a sole focus on the law enforcement response to State Capture ran the risk of ignoring necessary reform on the side of the private sector when it came to regulatory bodies, the role of the auditing sector, and so on.

The ID’s Johnson also singled out banks for failing to perform their oversight duties in terms of State Capture and other corrupt activities.

“The banking sector has a right to report suspicious transactions through to the Reserve Bank and the authorities. This has not happened,” Johnson said. (It is not just a right, but a legal responsibility to report suspicious transactions, under the Financial Intelligence Centre Act).

She said this was one of the reasons private sector corruption appeared to be prosecuted less vigorously than public sector corruption: transparency requirements are often less onerous for the private sector, and matters are frequently not brought to the attention of law enforcement agencies.

“Compliance officers, even within companies, are non-compliant,” Johnson said.

“Would we like to prosecute corporates? Most certainly.” DM

Gallery

Comments - Please in order to comment.

  • Johan Buys says:

    When the book gets written about corruption in SA there will be no kind chapters on bankers, lawyers, auditors or advisors. They had to be completely and utterly incompetent to not notice and not report the stuff at Steinhoff or the less white corruption. Many people outside Steinhoff said that it was a scam : it was obvious from the gap between headline earnings and cashflow. The unreported related transactions were immense in scale – I think Wiese’s Southern View debt laundry was over R15 billion – and certainly had to involve Steinhoff’s bankers, lawyers, auditors and advisors. Fee festival for all.

  • Jellybean Jellybean says:

    When there’s an admission of skills shortage, what must one’s response be. There are many sophisticated minds passing their time in their gardens, but THEIR pigmentation remains unfavourable. The solutions to ALL these problems are embarrassingly obvious, however those with the erudition remain incarcerated. It’s time that those who make decisions swallow their pride and subjugate their ego

  • Debbie Farnaby Farnaby says:

    I do believe the skills exist in the country – maybe as retired individuals or individuals running their own businesses. I also believe there would be merit in a call for volunteers who have the necessary skills and interest and are assured confidentiality in assisting the NPA. I don’t know this can be facilitated but we do need to demonstrate that criminals will be brought to book

Please peer review 3 community comments before your comment can be posted

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options