SARB freezes billions in Steinhoff accounts — but you wouldn’t notice in company financial statements

SARB freezes billions in Steinhoff accounts — but you wouldn’t notice in company financial statements
Illustrative image | Former Steinhoff CEO Markus Jooste. (Photo: Gallo Images / Brenton Geach) | Executive directors Theodore de Klerk (glasses) and Louis du Preez. (Photo: Dwayne Senior / Bloomberg via Getty Images / Supplied) | A Steinhoff International Holdings logo in Stellenbosch, 2016. (Photo: Waldo Swiegers / Bloomberg via Getty Images) | Nadine Hutton / Bloomberg via Getty Images

The South African Reserve Bank froze the funds in five accounts linked to Steinhoff’s local operations – said to hold a cumulative value of about R5.5bn. The Reserve Bank’s intervention is sure to tie a knot in operations but has not been declared in so many words in Steinhoff’s latest annual financial statements. Some chutzpah for a company previously found to have misrepresented its financial statements.

The SA Reserve Bank (SARB) seems to have a strong suspicion that Steinhoff, under the management of ex-CEO Markus Jooste, breached the country’s exchange control regulations.

The central bank’s Financial Surveillance Department sent an order to FirstRand Bank in May to freeze five accounts linked to Steinhoff International Holdings (Pty) Limited, Steinhoff Investment Holdings Limited and Steinhoff Africa Holdings (Pty) Limited.

The accounts are said to have held a total of at least R5.5-billion at the time, a figure supported by the company’s latest annual financial statements.

The action is part of a broad SARB investigation – codenamed Project Castle – into seminal wrongdoing at Steinhoff. The global retailer became infamous for being the incubator of South Africa’s biggest fraud since Jooste’s startling resignation in December 2017, a perception bolstered by a 2019 PwC forensic report which included in its findings that Steinhoff declared “income” of €6.5-billion from fictitious and/or irregular transactions in the company’s annual financial statements going as far back as 2009.

In an email to Scorpio, Steinhoff CFO Theodore de Klerk did not answer questions pertaining to the exact reasons for the SARB’s suspicions, or whether Steinhoff’s current management will ask a court to review the SARB decision.

The freezing order allows no funds in the Steinhoff accounts to be withdrawn without the SARB’s express approval. The reason is that, if the SARB finds that Steinhoff did indeed contravene South Africa’s exchange control regulations, a part or the entire sum of frozen cash can be forfeited to the state.

Based on a hot-headed court fight between the SARB and polo-playing socialite Berdine Odendaal, Jooste’s girlfriend and beneficiary of at least R60-million in questionable Steinhoff money which last year was also frozen under Project Castle, we know that SARB carefully scrutinises all applications for withdrawals and is prepared to delay or decline the release of funds when deemed necessary.

What is more: All applications for the funds must be made under oath. It means Steinhoff will have to draft a well supported application under oath to the SARB every time the company needs to pay for as much as a mattress – all the while sitting on its hands during the days or weeks the SARB ponders the decision.

A freezing order being one of the SARB’s sharpest teeth, the length of time it will take to effect any payment to any creditor, the possibility that the entire sum may be forfeited to the state and with the Odendaal example on their front stoep, Steinhoff management can therefore expect the SARB freezing order to possibly materially influence operations.

Adding to Steinhoff’s headache is that the group’s total liabilities exceed its total assets – solvency and liquidity are already under pressure.

It is surprising, then, to note nothing appears in Steinhoff’s latest financials that sounds like “Dear Creditor and Investor, SARB froze our bank accounts”.

Steinhoff’s unaudited financial results for the six months ended 31 March 2023 are published here.

There is no mention of the SARB using one of the toughest measures available to it against the company in the financial statements section headed “regulatory engagement”. Nor is it mentioned under “risk management”. The heading “events after the reporting date” even notes this questionable sentence: “Apart from the events set out above, no material events have occurred after the Reporting Date.”

Ambiguous description

The single paragraph in the entire 76-page financial statements document that may lift a reader’s eyebrow in confusion, is this: “…accounts holding €285.6-million (ZAR5.52-billion) of the Group’s funds are subject to SARB approval prior to making any withdrawals. Any conditions required by SARB relating to their approval for withdrawals and the time frame relating thereto is currently unknown to the Group.”

This ambiguous description of the latest Steinhoff crisis appears under the headings “regulatory engagement” and “risk management” as well as in an explainer underneath the cash flow statement. The same wording is repeated once in the document as a footnote.

The average businessperson is, however, very aware that any money moving in and out of the country must – under perfectly normal and legitimate circumstances – be “cleared by SARB”.

The question then is whether the Steinhoff financial statements document is clear enough to assist a person not educated in forensic financial investigations – say, the owner of a clothing brand, a doctor or a teacher – to differentiate between the movement of legal funds and that of suspicious, frozen funds which may be forfeited to the state.

The fact that no sharp financial analyst or journalist has yet picked up on Steinhoff management’s impossibly vague description – or omission – of “SARB froze our accounts” is, perhaps, quite indicative.

Steinhoff’s CEO, Louis du Preez, did not answer his phone. Steinhoff’s board chair, Moira Moses, referred questions to the company CFO.

Steinhoff CFO Theodore de Klerk did not answer a list of questions about the SARB freezing the company accounts – including whether local and offshore creditors were informed of the latest SARB action. De Klerk simply repeated the obscure description above, adding that “the above was clearly disclosed” (our emphasis in bold).

We add his full comment here:

steinhoff billions

In late June, about a month after the SARB froze Steinhoff’s local accounts, a Dutch court confirmed Steinhoff’s plan to change from a listed company owned by shareholders to a delisted group under the control of its creditors.

Locally, PSG Securities sent an email to its clients this week about engaging with Steinhoff in the matter of investor payouts.

De Klerk also did not answer questions about the impact the SARB order may have on these business operations.


The SARB action against Steinhoff follows movement against individuals seemingly responsible, in part, for the group’s woes.

In October last year, the SARB attached Jooste’s assets of about R1.4-billion, which include Lanzerac Wine Estate in Stellenbosch, four pieces of land linked to boutique winery Klein Gustrouw in Stellenbosch, the content of Jooste’s Hermanus compound in Hermanus, the Jooste family’s Silver Oak Trust and five cars registered to his wife and chauffeur.

In the meantime, a German court has issued a warrant of arrest for Jooste.

The assets of Chris Grové, Steinhoff’s former manager for risk (and a former SARB employee) as well as that of Ben la Grange, former Steinhoff CFO, were also attached last year, as detailed here by News24.

In April 2021, the SARB also attached assets and froze bank accounts linked to Odendaal, as Daily Maverick wrote here. DM


Comments - Please in order to comment.

  • Graeme Bird says:

    Nothing from the anti-cANCer crew and supposedly passionate fighters for accountability in SA who are regularly seen spewing their rabid stuff in the DM comments section? Are these guys too white? Look too much like DA supporters?

    • Ruby Delahunt says:

      I was wondering the same thing! A Scorpio article on corruption with no comments? How interesting…

    • Johann Olivier says:

      Yes. Notable. Thieves are thieves. Apparently, non-ANC thieves seem to be overlooked. I guess one big difference. This is just good old time corporate larceny – indirect thieving from the government (taxes, thus the South African people). The ANC steals directly from the coffers. The latter has a fiduciary responsibility to the people of the entire country. The former? Not so much. Shareholders &, possibly, stakeholders.

  • Gerrie Pretorius says:

    Jooste should have been jailed long ago. The keys thrown away, so he gets his breakfast pap late afternoon.

  • Johan Buys says:

    One of these days all the corrupt old oom will buy control of Steinhoff for peanuts and bury it and with it the claims the company should have instituted against them. Imagine the tax losses you can buy for pennies on the pound!

  • Dee Bee says:

    Jooste and all those who fleeced their investors (which I’m assuming means most of us who have pensions related to the JSE) need to be chucked in prison for life. I can understand – not justify – stealing to keep a roof over your head in this shambles of country thanks to the ANC, but this was simple greed, on an industrial scale to sustain a lifestyle he wasn’t entitled to. No better than the State Capture crowd, to be honest.

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