Home Economy FSCA finds no evidence of insider trading on Steinhoff shares

FSCA finds no evidence of insider trading on Steinhoff shares


Three account holders that traded Steinhoff shares ahead of its collapse have been cleared of wrongdoing by the Financial Sector Conduct Authority.

“We found no reason to believe that any of these shares were traded in contravention of the Financial Markets Act,” said Brandon Topham, a divisional executive for investigation and enforcement at the FSCA.

This comes after a report in the media that former chief executive Markus Jooste, who resigned after the scandal, reportedly advised friends to sell the group’s shares a week before the share price collapsed.

The accounts were amongst those investigated for insider trading after Steinhoff’s stock turned volatile before the company disclosed massive accounting irregularities in December 2017.

FSCA said an investigation where another R46 million worth of shares traded is still ongoing and an update on these would be provided upon their conclusion. In total, around R1.7 billion ($122 million) was traded ahead of Steinhoff’s announcement.

Meanwhile, Steinhoff has offloaded several assets, including the Austrian furniture chain Rudolf Leiner GmbH and stakes in firms such as KAP Industrial Holdings Ltd. Conforama may also be for sale and it’s considering thousands of job cuts, Paris-based BFM TV and Le Figaro said in February. Steinhoff hasn’t commented on those reports.

Other assets owned by Steinhoff include US bedding chain Mattress Firm, bought for $3.8bn in 2016 as part of an aggressive expansion drive.

In a separate statement, Steinhoff said Alexandre Nodale had stepped down as deputy chief executive of the group but would stay on as the CEO of Conforama until the company finalises its long-term financing. Steinhoff said it was unlikely to fill the deputy CEO position, which was created shortly after the company revealed the fraud in 2017.

Jordan Weir, a trader at Citadel, said the damage had already been done to Steinhoff’s share price and investors alike regardless of what had been uncovered through the investigations surrounding Steinhoff, and indeed what was still to be revealed.

“From here on not much is happening,” said Weir, “except for the curtains being lifted bit by bit for shareholders and the public, shedding light on all the past discrepancies entangling Steinhoff.

“No major benefit to Steinhoff or its shareholders is likely to be seen from these kinds of announcements. Instead, it functions more as a process of clearing the names of people who may have been seen to have been involved in any questionable dealings and practices.”





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