Two Tesco directors cleared of fraud as judge labels case 'weak'
Crown court jury instructed to acquit duo over the £250m black hole in profits in 2014
How easy is it to prove fraud versus aacounting malpractice ....?....perhaps in steinhoffs case it may be eaiser...or pehaps not....?
What quantum of the right down can you put to as fraudulant and poor business .....
This is going to be long long case and settlement may not be the quantum everyone expects. And steinhof maybe able to claim the quantum from third parties and insurers....
Its a long and painful journey but if you have cents to risk.....i would gamble on this share.....not sense....
The more the media gets frantic the more i am convinced to go the opposite. Have followed the tesco debarcle for many years .... media were all over and now silenced.....
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Good point also it make be dissimilar cases.
For the MJ case, it should be relatively easy to prove the related party transactions. There were many, and going back to far longer that the 9 years that is reflected in the PwC report of overstated profits. The overstatement of income was small fry in the greater scheme of things - less than 10%.
The reason for this is that at the beginning, many of the related party transactions benefited MJ and his cronies when they used Steinhoff as a personal bank and sold assets at a vastly overstated price to Steinhoff a few years after acquiring them. These include the forestry deal, a large number of properties in SA, Europe and Australia. However, these transactions while fraudulent, did not inflate the Steinhoff revenue or earnings. They "merely" increased costs of assets and therefore overstated the balance sheet.
The above could have been somewhat managed if there were no contagion. But there was. The higher Weighted Average Cost of Capital (WACC) led to enormous write downs in Goodwill & Intangibles..
1. On the balance sheet, Impairing the assets (E12.3b) led to an anemic net asset position.
2. Equity was restated down by E10.9b
The result was that the NAV per share (before the additional MF impairments introduced on the AFS2017) dropped by 66%.
There is a pretty solid case against MJ. He will be found guilty and he will end up as a guest of the State.
But the effect of his actual personal benefit scheme was chicken feed compared to the consequential losses to Steinhoff and by association the shareholders.
Best Regards
Captainfrom82
