The Financial Services Board (FSB) is investigating four cases related to alleged irregularities committed by Steinhoff, the leader of the FSB’s directorate of market abuse investigation team, Alex Pascoe, said on Wednesday.
The FSB has summonsed former Steinhoff CEO Markus Jooste to answer questions related to its investigations.
The first investigation under the Financial Markets Act relates to possible insider trading and focuses on a foreign account that sold Steinhoff shares during August 2017. The trading account belongs to a foreign incorporated private company.
Pascoe said the FSB was investigating whether unpublished, price-sensitive inside information had “crystallised” before the transactions.
“The investigation necessitates sending and receiving several requests to foreign regulators to assist us in collecting evidence from witnesses and legal entities,” Pascoe told members of four parliamentary committees during a hearing on Steinhoff.
Another investigation into insider trading focused on numerous trading accounts that sold Steinhoff shares between September and December 2017. The trading accounts under investigation belong to individuals, trusts, and corporate entities some of which are based abroad.
“We are establishing if the trading accounts under investigation are related or linked to Steinhoff or any of its executives or to Steinhoff-related parties,” Pascoe said.
“Due to the numerous accounts under investigation and the volume of evidence that has to be collected, this investigation will take longer to finalise.”
The third investigation — the biggest one under the Financial Markets Act — related to allegations of false statements focused on the 2015 and 2016 financial statements and the 2017 interim results.
Finalisation of this investigation required Steinhoff to publish its 2017 financial statements and the restated statements for 2015 and 2016 so the FSB can determine the extent of the misstatements.
“We will then evaluate what was misstated previously and who should have known or ought reasonably to have known that it was false/misleading/deceptive at the time. While awaiting the financial statements, the FSB is collecting evidence from foreign regulators and had met with the Reserve Bank, the Independent Regulatory Board for Auditors and the Companies and Intellectual Property Commission.
Various witnesses and executives of Steinhoff had been interrogated and summonses have been issued for the interrogation of additional Steinhoff current and former executives and other witnesses.
Regarding the fourth investigation into insider trading and false statements, Pascoe said it dealt with a report that was published on December 7 after Steinhoff announced that it had launched an investigation into alleged accounting irregularities and that Jooste had resigned.
“The report was published by a foreign research company that also might have been a short seller of Steinhoff shares according to its published report. The other three market abuse investigations will provide the necessary information to finalise this investigation,” Pascoe said.