More arrests in Steinhoff saga as executives face justice

“Some are born sly, some achieve slyness, and some have slyness thrust upon them.”

Had William Shakespeare seen PwC’s report on Steinhoff, he might have reworded his famous Twelfth Night quote this way. But with Markus Jooste – the former Steinhoff chief executive at the centre of the R100-billion accounting scandal – having taken his own life, we may never know into which category his inner circle truly falls as they, one by one, begin to face justice.

The first to fall were Dirk Schreiber, Steinhoff’s former European finance chief, and Siegmar Schmidt, a former business associate who worked closely with Jooste. Both were convicted of fraud in 2023 by the Oldenburg Regional Court in Germany.

Now, two more former Steinhoff executives, Iwan Schelbert and Hein Odendaal, have been arrested. Their court appearance on 14 February brings the number of arrests in South Africa related to the case to five.

The first to be arrested locally were Jooste and Steinhoff’s former treasury head, Stéhan Grobler (pictured), followed by the group’s former chief financial officer, Ben la Grange.

Jooste took his life on 21 March 2024, while La Grange was sentenced on 3 October 2024 to 10 years’ imprisonment, with five years suspended for five years. His suspended sentence is conditional on his co-operation as a witness for the State in future criminal cases involving Steinhoff directors, officers, and employees.

Grobler is currently out on bail, with his next court appearance scheduled for 30 May.

Schelbert and Odendaal surrendered themselves to the Hawks’ Serious Commercial Crime Investigation unit just hours before their scheduled court appearance at the Pretoria Specialised Commercial Crimes Court on 14 February. They face multiple charges, including violations of the Prevention of Organised Crime Act, the Financial Markets Act, the Companies Act, and the Prevention and Combating of Corrupt Activities Act.

According to News24, Schelbert served as managing director of Steinhoff At Work from June 2004 until March 2018, playing a role in signing off the group’s financial statements. Odendaal was a managing director of two Steinhoff affiliates in the United Kingdom and a longtime director of Steinhoff Africa Holdings and Steinhoff At Work. For years, he oversaw the publication of Steinhoff At Work’s audited financial statements.

In court, the two accused stated in affidavits that they intend to plead not guilty and will prove their innocence.

Magistrate Nicca Setshogoe granted both accused bail of R150 000 each, with several conditions. They are prohibited from interfering with State witnesses, either directly or indirectly. They must report to their nearest police station every Monday between 6am and 6pm. Their passports must be handed over to the investigating officer, and they are not allowed to apply for new ones. They are also restricted from travelling outside South Africa or their respective provinces without informing the investigating officer. Additionally, they must not commit any criminal offences.

The case has been postponed to 30 May to allow time for obtaining a racketeering certificate and setting a trial date.

‘A small group’

Although the authorities have yet to confirm when further arrests will follow, the individuals identified in a forensic investigation may offer some clues as to who could face prosecution next.

Steinhoff commissioned PricewaterhouseCoopers (PwC) to conduct a forensic probe following the company’s dramatic collapse in December 2017. The investigation, which took 14 months to complete, produced a report exceeding 3 000 pages, along with more than 4 000 annexed documents. On 15 March 2019, Steinhoff released an 11-page summary outlining PwC’s key findings.

According to the summary, a “small group of Steinhoff Group former executives and other Steinhoff non-executives structured and implemented various transactions over a number of years which had the result of substantially inflating the profit and asset values of the Steinhoff Group over an extended period”.

The report detailed irregular transactions spanning eight years and involving eight different firms. It also uncovered “a pattern of communication which shows the senior management executive instructing a small number of other 13 Steinhoff executives to execute those instructions, often with the assistance of a small number of persons not employed by the Steinhoff Group”.

A major legal breakthrough came in December 2024, when the Supreme Court of Appeal ruled that the full PwC report must be made public. On 18 December, select media outlets obtained access to the complete document, shedding further light on the extent of financial misconduct within the company.

The recent arrests of Schelbert and Odendaal coincide with another significant development: the South African Reserve Bank (SARB) has secured access to data copied from Jooste’s electronic devices during a 2022 raid.

The two-year legal battle between the SARB and Jooste’s legal team, which argued that the information was protected by client-lawyer privilege, ended on 5 February 2025 when the Western Cape High Court ordered the handover of all physical and electronic records seized in the raid.

The SARB is now positioned to investigate whether Jooste violated South Africa’s exchange control laws.

The ‘handwritten note’

Investigators are likely to follow the “pattern of communication” identified in the PwC report as they pursue further arrests in the Steinhoff case.

One such pattern was detailed in a Financial Services Tribunal judgment delivered on 18 September 2023 – a handwritten note that ultimately led to the arrest and prosecution of La Grange. The investigation into the note also linked Schelbert to the case.

The Tribunal’s ruling upheld the JSE’s decision to fine Jooste a total of R15 million and ban him from serving as a director of a listed company for 20 years.

Read: Tribunal confirms JSE’s 20-year ban and R15m fine on Markus Jooste

In January 2023, the JSE imposed two R7.5m fines on Jooste, one of which was linked to a fictitious transaction that fraudulently inflated the income of a Steinhoff subsidiary, Steinhoff At Work, by about R376m.

Central to the scheme was Steinhoff’s involvement with the TG Group.

Read: How the Steinhoff Group propped up its profits

In June 2014, the Steinhoff Group became part of a structure referred to as the “buying group”, where volume rebates were purportedly negotiated and collected by TG Group on behalf of Steinhoff and other third parties. TG Group issued invoices to Steinhoff for services such as retail concept sharing, marketing support, and reimbursement of fixed costs. Steinhoff then recorded these invoices as revenue, other income, or cost reductions.

However, the TG Group did not collect contributions from third parties, nor did any external cash flow into Steinhoff. Instead, payments were funnelled internally through Steinhoff’s own entities. For instance, in the financial year ending 30 September 2016, Steinhoff Investments Group invoiced TG Group for about R377m – an amount that was later paid back via a Steinhoff NV Group entity.

On 15 November 2016 – after Steinhoff At Work’s financial year-end – Jooste prepared a handwritten document titled: “Steinhoff@Work Pro Rata Contribution of World Wide Sourcing Global Rebate Scheme VIA the Buying Organisation TG Sourcing”. The document detailed 22 pro rata contributions that Steinhoff At Work would supposedly receive from TG Sourcing, totalling €23.5m.

Jooste performed the basic calculations in the presence of La Grange and handed the note to him, instructing him to generate an invoice for TG Sourcing SARL, a TG Group entity. La Grange then instructed Schelbert to issue the invoice, attaching Jooste’s handwritten note as reference.

On 21 November 2016, La Grange emailed the invoice to Jooste, who responded that he would “organise payment”. A few days later, on 27 November, Jooste finalised a confirmation letter –pre-dated to 25 November – stating that the TG Group had reconciled payments for Steinhoff’s financial period ending 30 September 2016. He specifically instructed that the letter be printed on TG Management Holdings SA letterhead.

By 28 November, members of the Steinhoff Group circulated an email with the subject “Services Agreement” to the director of TG Sourcing. The email contained two attachments: the generated invoice and a draft agreement between Steinhoff At Work and TG Sourcing. Later that day, representatives of the TG Group returned a signed copy of the agreement, falsely confirming that the TG Group had collected the rebates and remitted them to Steinhoff At Work.

On 29 November 2016, Jooste forwarded a copy of the TG Group’s letter, dated 25 November, to Xavier Botha, an audit partner at Deloitte. The letter was presented as audit evidence for Steinhoff At Work’s 2016 audit. The same email, with attachments, was also sent to the audit partner at Commerzial Treuhand GmbH, which was responsible for auditing several of Steinhoff’s European entities.

The JSE’s investigation ultimately found that the entire transaction was fraudulent.