15225 replies to this topic

[DayTraderDad]

Snh going up... I reckon eoh guys r buying in

Haha

[Lionelza1]

Snh going up... I reckon eoh guys r buying in

[DayTraderDad]

Audit firms up in arms over Irba’s possible search and seizure powers: 

https://www.moneyweb...seizure-powers/

 

"SA’s biggest auditors, including PwC and Deloitte, are opposing the proposed amendments saying Irba’s powers would be extreme, while the watchdog believes they are necessary to give it more muscle."

 

Typical the auditors complaining about regulation!!!! These guys are real jokers!!!

And another article: https://accountingwe...monopoly-in-sa/

[DayTraderDad]

Audit firms up in arms over Irba’s possible search and seizure powers: 

https://www.moneyweb...seizure-powers/

 

"SA’s biggest auditors, including PwC and Deloitte, are opposing the proposed amendments saying Irba’s powers would be extreme, while the watchdog believes they are necessary to give it more muscle."

 

Typical the auditors complaining about regulation!!!! These guys are real jokers!!!

[Lionelza1]

And some question why I'm doubtful afs might not come out as these noobs announced.... They fckn clueless is why... Announce something and then delay last minute... Noobs

[Lionelza1]

I think ppl instead caught up to awesome management and their last minute delays.... That's how I feel anywayz, got screwed before with that kak

[Milo]

Just checked a up on this..... Inside info perhaps?

 

 

Maybe people starting to realize they might lose out if they don’t act now

[DayTraderDad]

Hi DTD,

 

On the face of it, I find it incredible that you still question Jooste's culpability, when in fact he himself has apologised to staff at Steinhoff.  for what he euphemistically referred to as his "mistakes".  Believe me mate, he is guilty as anything along with his cronies who were directors at the off-balance sheet companies - I am unable to state specifically what will soon become common knowledge anyway.  But, he is guilty as sin!

 

If the case against Jooste was not so comprehensive and airtight, I would have stated that we must agree to disagree here.  Instead, I must advise mate, that you are dead wrong.  This is not about having a different opinion on the Accounting treatment of a transaction.  This is/was overt fraud. 

 

Even worse, it goes back many, many years.  Way before 2016 (eg. the Unitrans deal, the forest purchased at massive premiums to onl a few years prior when Jooste himself advised against buying, Steinhoff selling its properties to Hemisphere, and then acquired again at a massive premium a year after selling the properties to Hemisphere), the deal with CAPFIN, There are many others - almost every deal and acquisition was used for self enrichment. 

 

Even if you are disputing the case because of Accounting interpretation, even you cannot dispute that he overtly lied about the off-balance sheet companies, and then went to great lengths to conceal the relationship.  The loans that he made to these companies without advising of the related party nature of the transactions, and then to later claim back the very money that Steinhoff guaranteed as a werchel (cash equivalent allowed under German laws).  In effect, Jooste made Steinhoff loans to his henchman's companies, guaranteed these, and then claimed back the debtor balances as cash equivalents.  Simultaneously he booked the "interest payable by the fictitious debtors" as income

 

Generally speaking though, Jooste took advantage of various shortcomings and used each one to improve his own position.  There were multiple different audit firms used for the various businesses eg. SEAG, Steinhoff Europe, Hemisphere etc all had different auditors.  Had Deloitte been a single auditor, they would very likely had picked up on the  related party guarantees that Steinhoff had provided for the off-balance sheet companies.

 

I do not think that the Supervisory Board (the structure used under Dutch laws) are complicit.  They were just to cozy in their relationship with the Management Board which was in itself lied to by Jooste. 

 

The various directors could be accused of failing to exercise due diligence.  But there are many reasons that they chose to believe Jooste.  Their blame is a fault of ommission, not commission.

 

You are in Cape/Somerset West...do the research mate.  Ask the questions.  It is pretty much an open secret.  I am surprised that you are in the dark.

 

Best Regards

Captainfrom82

Hi Captain,

 

Thank you well noted. I think we missing each other, I have read a lot about the SNH and Jooste saga and I agree with you fully but in SA one is presumed innocent until judgement of guilt.

There is enough information to suggest fronting, insider trading etc but this all has to be proven. That's why I say what if ? in the courts it is proven that he was operating legal and the accounting and legal rules allowed. 

Insider trading is running around everywhere all the time. Why on Friday all of a sudden the SNH start to run up? This happens every time the share runs up then a few days later news comes out. 

You mentioned that if Deloitte was doing all the auditing would maybe find it well when I listen to the testimony of the big four in the House of Commons in the UK came out its better to have different auditing firms doing auditing to ensure less problems. This is the requirement in France.

Read the article below it will explain where I am coming from " UK competition watchdog investigates scandal-hit audit sector "

 

https://www.theguard...countancy-firms

 

Another interesting article: https://www.theguard...threat-from-cma

 

A interesting insert below so there are lots of Steinhoff running around because the policing authorities allow it to happen.

The FRC has been deemed toothless by critics, having cleared PwC over the Tesco accounting scandal, which saw the supermarket overstate profits by hundreds of millions of pounds. The watchdog also cleared KPMG for its audit of HBOS, which was deemed to be in good financial health just months before the bank’s collapse and government bailout.

 

KPMG, EY, Deloitte and PwC were most recently criticised for failing to spot problems at Carillion before the construction firm fell into administration in January, and for prioritising profits over proper scrutiny of companies during their audits. MPs also accused the firms of “feasting” on the carcass of Carillion after they banked £72m for consultancy work in the years leading up to the firm’s collapse.

 

I am not in the dark just realistic if you read the articles above the crooks are telling the police(auditors) what to do. For me the end game going to be a legal fight between Jooste and Deloitte with Steinhoff a victim with the shareholders leaking their wounds. 

 

Cheers,

DTD

[Lionelza1]

Anyway boys, I’ve bought some more.
Let’s hope for some positive movement this coming week

 

cool, i'm adding more last week in feb

[LarryK]

Anyway boys, I’ve bought some more.
Let’s hope for some positive movement this coming week

[Captainfrom82]

Hi Captain,

Any reference to the statement you mentioned:

"Jooste's personal tax returns were not consistent with his actual income"

?

 

Hi Tom,

 

I regret that I am unable to provide absolute proof as by law, Tax affairs are protected under the relevant laws that SARS operates in. 

 

However it is common knowledge that he got  into a dispute and settled out of Court for over R200m.  There are general links that some online research may provide eg. https://informationc...markus-jooste/ states "He has become a controversial figure after the South African Revenue Service (equivalent to the IRS) publicly questioned his use of tax shelters to avoid tax."  See also https://www.forbes.c...ooste_29FW.html

 

The question you should be asking is that given the immense sums of tax that SARS felt was payable (and was eventually paid by Jooste in settlement) what was his source on this income.  SARS only taxes income realised, and their case was strong enough for Jooste to pay over R200m.  His income therefore had to be well over half a billion.  He did not sell any Steinhoff shares...so where did the income arise?

 

Best Regards

Captainfrom82

[Captainfrom82]

 

Hi Captain thank you for this well explained note.

 

For me the common failure is accounting which allowed the likes of Jooste do all you mentioned in all the 4 points. The media and everybody focus on Jooste but auditors have been masters at keeping out of the news. Can you remember if Deloitte was called to parliament to explain what happened in the SNH accounts?

My thoughts on your points above:

Point 1 - Surely auditors should have question how a business is generating such a miraculous turnaround because assets must be evaluated on a yearly basis. This problem is not unique to Jooste but seems to appear in a number of companies world wide.

Point 2 - Jooste could have not done this all by himself and would have hired maybe Deloitte as consultancy to help him do all that which surely he needed to have the board to support. Like Jooste replied to questions in Parliament all decision were done by the board even when buying new business.

Point 3 - I think this was one of the biggest issues yet cannot believe that the auditors would not the very least try to understand/question all the moneys/business moving around.

Point 4 - Surely Jooste did not do his own returns and there would have been accountants involved which have a responsibility to report any illegal activity to  SAICA. 

 

You see for me the question still remains was there crime committed or the accountancy standard allowed this to happen?

 

For example Hemisphere property was initially evaluated at EUR2.2 bil by some evaluating person or business then a few months later another company evaluates the same assets and finds a value of EUR1.1 bil but does not take rental income into account and valued the properties as empty. So who is correct???  All I know as a investor the balance sheet just took a hit for EUR1.1 bil and reduced the NAV by 0.26 euro cts. But in the mean time SNH earns EUR 26 mil on rental income per year which makes no input to the latest evaluation.

 

For me accountants are the evil of the world of finance that allow people like Jooste do rip the shareholders because had the accountants had the bxxs to whistle blow this type of fraud (which to my understanding is a requirement by SAICA) would be much reduced.

 

 

 

 

Hi DTD,

 

On the face of it, I find it incredible that you still question Jooste's culpability, when in fact he himself has apologised to staff at Steinhoff.  for what he euphemistically referred to as his "mistakes".  Believe me mate, he is guilty as anything along with his cronies who were directors at the off-balance sheet companies - I am unable to state specifically what will soon become common knowledge anyway.  But, he is guilty as sin!

 

If the case against Jooste was not so comprehensive and airtight, I would have stated that we must agree to disagree here.  Instead, I must advise mate, that you are dead wrong.  This is not about having a different opinion on the Accounting treatment of a transaction.  This is/was overt fraud. 

 

Even worse, it goes back many, many years.  Way before 2016 (eg. the Unitrans deal, the forest purchased at massive premiums to onl a few years prior when Jooste himself advised against buying, Steinhoff selling its properties to Hemisphere, and then acquired again at a massive premium a year after selling the properties to Hemisphere), the deal with CAPFIN, There are many others - almost every deal and acquisition was used for self enrichment. 

 

Even if you are disputing the case because of Accounting interpretation, even you cannot dispute that he overtly lied about the off-balance sheet companies, and then went to great lengths to conceal the relationship.  The loans that he made to these companies without advising of the related party nature of the transactions, and then to later claim back the very money that Steinhoff guaranteed as a werchel (cash equivalent allowed under German laws).  In effect, Jooste made Steinhoff loans to his henchman's companies, guaranteed these, and then claimed back the debtor balances as cash equivalents.  Simultaneously he booked the "interest payable by the fictitious debtors" as income

 

Generally speaking though, Jooste took advantage of various shortcomings and used each one to improve his own position.  There were multiple different audit firms used for the various businesses eg. SEAG, Steinhoff Europe, Hemisphere etc all had different auditors.  Had Deloitte been a single auditor, they would very likely had picked up on the  related party guarantees that Steinhoff had provided for the off-balance sheet companies.

 

I do not think that the Supervisory Board (the structure used under Dutch laws) are complicit.  They were just to cozy in their relationship with the Management Board which was in itself lied to by Jooste. 

 

The various directors could be accused of failing to exercise due diligence.  But there are many reasons that they chose to believe Jooste.  Their blame is a fault of ommission, not commission.

 

You are in Cape/Somerset West...do the research mate.  Ask the questions.  It is pretty much an open secret.  I am surprised that you are in the dark.

 

Best Regards

Captainfrom82

[Tom]

https://www.moneyweb...-investigation/

[Tom]

Hi Captain,

Any reference to the statement you mentioned:

"Jooste's personal tax returns were not consistent with his actual income"

?

[DayTraderDad]

Lionel you’re almost in the money

Anyone’s thoughts on next week?

I expect the share price to rise to the R2.00 but I think the rise we saw yesterday is due to leaking  Q1 results.

[DayTraderDad]

HI DTD,

 

Jooste was far more than a dictator, braggard, bully and tyrant who was in tolerant of any opposing views.  But there was definitely smoke and mirrors used in his Accounting.

 

(1) In his early years, he used these attributes to bolster his various acquisitions (eg. his deals with Pat Cornick that eventually led to him acquiring Afcol for a staggeringly cheap price - he effectively got the business at 25% of his previous failed price).  But from the very beginning, after this deal, somehow Cornick seemed to miraculously add more to Jooste's company that seemed possible.  Its a little like you buying a business that is showing R100k annual profit over the past  5 years, and then miraculously after you buy it, suddenly the profits are up 5 fold. 

 

(2) The changes in the various inputs into Steinhoffs financials (massive acquisitions, changes in financial periods, de-listing units, changing primary listing, moving away from South Africa to Frankfurt for listing and then making the business domiciled in Amsterdam, etc)  made a proper comparison extremely difficult.  Even within the existing businesses, Steinhoff would capitalise some expenses, sell the unprofitable units for huge sums, and remove some businesses from the annual results to discontinued operations.   This was ALL done intentionally. It was to obfuscate and conceal the real position.  These were all overt actions designed to support his unlawful actions.

 

(3) The off-balance sheet companies that Jooste fraudulently declared as independent but in reality were controlled by Steinhoff/Jooste through his henchmen is unquestionable.  These will form probably the biggest part of the PwC report and will be submitted as proof.

 

(4) Jooste's personal tax returns were not consistent with his actual income - to the point that he eventually had to settle with SARS for hundreds of millions.  This fact seem to escape many people's scrutiny, because it wass evidence that Jooste was somehow increasing his personal wealth yet was not selling are Steinhoff shares.  The KEY question is: what was the source of is income.

 

The 4 points above point the way - there is no doubt in my mind that Jooste has committed serious and OVERT fraud.  I believe that this will eventually be borne out in a Court of Law, and that he will be punished accordingly.  However, this may be years from now.

 

There is no question that Deloittes should have picked this up, and acted a lot sooner.  There are some mitigating factors in their defence, and to their credit they eventually did act (even if a little late).  Had they not acted Jooste would have continued on his merry way.

 

Best Regards

Captainfrom82

 

Hi Captain thank you for this well explained note.

 

For me the common failure is accounting which allowed the likes of Jooste do all you mentioned in all the 4 points. The media and everybody focus on Jooste but auditors have been masters at keeping out of the news. Can you remember if Deloitte was called to parliament to explain what happened in the SNH accounts?

My thoughts on your points above:

Point 1 - Surely auditors should have question how a business is generating such a miraculous turnaround because assets must be evaluated on a yearly basis. This problem is not unique to Jooste but seems to appear in a number of companies world wide.

Point 2 - Jooste could have not done this all by himself and would have hired maybe Deloitte as consultancy to help him do all that which surely he needed to have the board to support. Like Jooste replied to questions in Parliament all decision were done by the board even when buying new business.

Point 3 - I think this was one of the biggest issues yet cannot believe that the auditors would not the very least try to understand/question all the moneys/business moving around.

Point 4 - Surely Jooste did not do his own returns and there would have been accountants involved which have a responsibility to report any illegal activity to  SAICA. 

 

You see for me the question still remains was there crime committed or the accountancy standard allowed this to happen?

 

For example Hemisphere property was initially evaluated at EUR2.2 bil by some evaluating person or business then a few months later another company evaluates the same assets and finds a value of EUR1.1 bil but does not take rental income into account and valued the properties as empty. So who is correct???  All I know as a investor the balance sheet just took a hit for EUR1.1 bil and reduced the NAV by 0.26 euro cts. But in the mean time SNH earns EUR 26 mil on rental income per year which makes no input to the latest evaluation.

 

For me accountants are the evil of the world of finance that allow people like Jooste do rip the shareholders because had the accountants had the bxxs to whistle blow this type of fraud (which to my understanding is a requirement by SAICA) would be much reduced.

 

 

[Captainfrom82]

Haha I a agree with you fully but I think the only reason Deloitte acted like that is they got scared because in the UK authorities are already after auditors not to mention the fiasco in SA with KPMG. Haha Jooste is not my pal and will never be what he did (once proven) is not forgivable but what I am saying all the time is did he commit a crime or did the accountants approve  and he did everything inside the accountant standards but things got pear shaped when auditors got scared???

AU 110 Responsibilities and Functions of the Independent Auditor:

The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.

You see for me the whole problem is the word " reasonable " because what is reasonable to you might not be to me so depending which accountancy firm I use I can get different reasonable outcome and the part that makes me disappointed its legal!!

For what is interesting to me there seems to be no issues with EY audits and wonder why???

 

HI DTD,

 

Jooste was far more than a dictator, braggard, bully and tyrant who was in tolerant of any opposing views.  But there was definitely smoke and mirrors used in his Accounting.

 

(1) In his early years, he used these attributes to bolster his various acquisitions (eg. his deals with Pat Cornick that eventually led to him acquiring Afcol for a staggeringly cheap price - he effectively got the business at 25% of his previous failed price).  But from the very beginning, after this deal, somehow Cornick seemed to miraculously add more to Jooste's company that seemed possible.  Its a little like you buying a business that is showing R100k annual profit over the past  5 years, and then miraculously after you buy it, suddenly the profits are up 5 fold. 

 

(2) The changes in the various inputs into Steinhoffs financials (massive acquisitions, changes in financial periods, de-listing units, changing primary listing, moving away from South Africa to Frankfurt for listing and then making the business domiciled in Amsterdam, etc)  made a proper comparison extremely difficult.  Even within the existing businesses, Steinhoff would capitalise some expenses, sell the unprofitable units for huge sums, and remove some businesses from the annual results to discontinued operations.   This was ALL done intentionally. It was to obfuscate and conceal the real position.  These were all overt actions designed to support his unlawful actions.

 

(3) The off-balance sheet companies that Jooste fraudulently declared as independent but in reality were controlled by Steinhoff/Jooste through his henchmen is unquestionable.  These will form probably the biggest part of the PwC report and will be submitted as proof.

 

(4) Jooste's personal tax returns were not consistent with his actual income - to the point that he eventually had to settle with SARS for hundreds of millions.  This fact seem to escape many people's scrutiny, because it wass evidence that Jooste was somehow increasing his personal wealth yet was not selling are Steinhoff shares.  The KEY question is: what was the source of is income.

 

The 4 points above point the way - there is no doubt in my mind that Jooste has committed serious and OVERT fraud.  I believe that this will eventually be borne out in a Court of Law, and that he will be punished accordingly.  However, this may be years from now.

 

There is no question that Deloittes should have picked this up, and acted a lot sooner.  There are some mitigating factors in their defence, and to their credit they eventually did act (even if a little late).  Had they not acted Jooste would have continued on his merry way.

 

Best Regards

Captainfrom82

[Lionelza1]

Yea Larry almost in the moolah!... Still 2 weeks to go for the anticipated info... Eish I don't know seems early for Mr Market to be buying in but if the run up continues mon, Tues next week... Who knows

I feel the last week in Feb gonna be a lekka run IF we do not get any bad news

[LarryK]

Lionel you’re almost in the money 👍🏻

Anyone’s thoughts on next week?

[LarryK]

Could be normal pattern of share price going up until news comes out?