Steinhoff: SARB remains mum after employee allegedly violated cross-border transactions

SA Reserve Bank is a public institution that must account to the public, says a source. File: Photo

SA Reserve Bank is a public institution that must account to the public, says a source. File: Photo

Published Mar 19, 2024


The South African Reserve Bank (SARB) yesterday continued to remain mum on when it would be holding a media briefing after media reports broke last week that one of its employees had allegedly been overseeing Steinhoff International’s cross border-transactions in 2022.

Last week, an article was published in the Daily Maverick, “Steinhoff: Reserve Bank manager signed off on billions in alleged unlawful cross-border transactions (Part One).”

Steinhoff International was liquidated last year after an accounting scandal brought it to its knees. In 2017 when news broke out of the country’s biggest corporate fraud amounting to €6.5 billion (R134bn) which was explained as an accounting error. The fraud also cost the Public Investment Corporation close to R21 billion of investments.

The SARB said yesterday, “All matters related to corruption or of a criminal nature were referred to the relevant law enforcement authorities in 2022, and the matter now resides with them.”

According to Daily Maverick, the divisional head at SARB’s Financial Surveillance Department, Raymond Paola, allegedly facilitated the questionable facilitation of billions of Steinhoff rand out of South Africa via16 exchange control applications, contravening a litany of the bank’s rules governing cross-border transactions.

Hawks Colonel Katlego Mogale said yesterday in response to how far the case was progressing, “Good day, we definitely won’t be able to comment today as we only received this enquiry now and have to send it to investigators to afford the public proper information.”

Business Report sent the SARB questions at the weekend to confirm if the article was correct, and to inquire as to why a media briefing had not been called in light of these allegations.

However, the SARB said it was not responding to specific questions and could only provide general comment.

The SARB declined to answer questions, among others, on: whom Paola’s executives were in this Steinhoff saga; if SARB regulator controls had been fixed in the face of these alleged exchange control violations with Paola the last decision-maker at SARB, and if more senior people other than Paola were aware of the transactions.

A source, who declined to be named, said, “I am not surprised. SARB wants to keep this case close to its chest. We are simply asking what it is that they know, and in regard to why Paola was the only person signing on Steinhoff, and if anyone else knew about that.

“Frankly, the response smells of some cover-up or not wanting to be open about this. This is a public institution that must account to the public. They should have given responses to media questions. That response is just not sufficient. The public is owed a statement, without that is pre-empting anything that is within the pipeline of what the authorities are working on. I am quite shocked by such a short statement,” the source said.

The source called on SARB Governor Lesetja Kganyago to break the SARB’s silence.

Meanwhile, Cosatu’s acting national spokesperson Matthew Parks said yesterday the union remained deeply concerned that the respective law enforcement institutions, in particular the National Prosecuting Authority, and the Hawks had simply not moved to charge, prosecute and convict those involved in the Steinhoff theft of billions of workers’ pension funds.

“This saga has been continuing for over eight years and no one has seen a day in court. South Africa will not win the war against crime and corruption if we continue to treat those who steal workers’ pensions funds with kid gloves,” he said.

Subsequent to the Steinhoff fallout, Steinhoff’s Dutch shareholders sued Deloitte, Steinhoff’s directors, accountants and banks involved in the scandal to take responsibility for damages. Retail investors who saw the value of their investments obliterated in the wake of the Steinhoff accounting scandal were paid €55.34 million (about R1.2 billion at the time).