THE BOTTOM LINE
Ethics isn’t just a county in England, you Pepkor guys
Steinhoff spinoff has been tardy in acting over governance after the ‘irregular accounting’ debacle
What a curse Steinhoff has been. Almost 12 months after “accounting irregularities” were flagged by the board it is evident the damage was not confined to Steinhoff and its shareholders. So it’s difficult not to feel some sympathy for KAP Industrial Holdings and Pepkor, which are still suffering from collateral damage. The two groups are now required not only to deal with tough trading conditions but also the near-constant distraction created by Steinhoff-related matters.
All things considered, you would think governance issues feature top among management’s priorities. But for some reason that doesn’t seem to have been the case at Pepkor, which has only recently formed its own social and ethics committee (SEC).
The SEC is one of two board committees required by the Companies Act and by the JSE’s listings requirements, so it is difficult to understand why Pepkor has only now got around to putting one in place. There should have been one in place in September 2017 when it was listed under the Steinhoff Africa Retail (Star) name on the JSE.
The Star board explained in the corporate governance report issued early in 2018 – as part of its integrated annual report – that the requirement for an SEC was fulfilled during 2017 “by the Steinhoff Investment Holdings Limited Governance and Sustainability Committee”.
The idea of Star piggybacking on Steinhoff’s governance committee is as bizarre as it is terrifying.
Even after the December meltdown, when Star was independently listed on the JSE, there seems to have been little sense of urgency, with the company eventually taking the better part of 2018 to finally appoint its SEC.