Embattled Steinhoff said today, it had paid advisory fees of €275 million (R5,3 billion in today’s exchange rate) over the past two years as the group navigates its way from the financial mess left behind by its erstwhile CEO Markus Jooste.
The advisory fees paid by Steinhoff in just two years is more than the R4,3 billion the firm is valued at on the JSE.
The company said its advisory fees for the year ended September 2019 amounted to €158 million up from the €117 million it paid in the previous year. The company said the lion share of the money was on forensic investigation and “technical accounting support” and creditor advisor fees.
Steinhoff’s shares collapsed in late 2017 multiyear fraud that happened at the group became public which led to the resignation of Jooste and his cronies.
PricewaterhouseCoopers (PwC) last released a damning report that pointed to Jooste and other directors who, it said, recorded income from fictitious and/or irregular transactions between the 2009 financial year and 2017. PwC said the fraud saw the group’s profits inflated by €6.5 billion during the period.
The company was then forced to restate some of its financial results of the previous years as they could no longer be relied on. Steinhoff said it will endeavor to rein in advisory fees going forward.
“Every effort is being made to limit advisor costs and, with implementation of the financial restructuring now behind us, we expect the total to fall in the 2020 financial year,” the company’s management said in a statement.
“However, legal advisory fees are expected to remain significant in the period ahead as we attempt to resolve and deal with outstanding litigation and seek redress against former executives and related parties,” the statement concluded.