Steinhoff ex-CFO jailed over accounting scandal

Steinhoff International Holdings NV's former chief financial officer was handed a five-year jail term, making him the most senior executive to be imprisoned by a South African court over an accounting scandal that led to the near-collapse of the global retailer.

Ben la Grange, 50, whose official sentence is 10 years after pleading to one charge of fraud, won some leniency in a judgment at Pretoria Specialized Commercial Crimes Court because he'd repeatedly cooperated with investigators. 

Half of his sentence will be suspended for five years on condition that he's not found guilty of fraud in a higher tribunal during that period, the South African Police Service said in a statement on Thursday. He will also have to provide evidence to the state in any further criminal proceedings against directors, officers and employees of Steinhoff.

Waldo Swiegers/Bloomberg

La Grange first appeared in court in June, having only been added to the case by prosecutors following his ex-boss Markus Jooste's suicide. 

The National Prosecuting Authority and Directorate for Priority Crime Investigation in March secured arrest warrants for Jooste and former legal head Stehan Grobler, with the two men named as the lead suspects involved in the 2017 demise of the company that owned Conforama in France and Mattress Firm in the US. Jooste took his own life on March 21, after being notified of the arrest warrants.

Grobler is due to appear again on Oct. 4, according to the NPA's regional spokeswoman Lumka Mahanjana. La Grange's sentence is the NPA's first conviction of a former executive in the Steinhoff case.

Dirk Schreiber, the company's former European finance chief, a year ago became the first person to be imprisoned over the scandal. He was handed a 3 1/2 year jail sentence by a German court after being convicted of accounting violations and aiding credit fraud, although this was reduced by a year because of how long the probe took. Schreiber provided information to the investigations in South Africa.

Jooste was also charged in the German case, but failed to show up in court for his trial in April 2023. He only appeared once, in South Africa's parliament, when in 2018 he told lawmakers in Cape Town that the company's woes originated from a protracted dispute with a former partner. George Alan Evans, who was charged in that case next to Jooste, settled his case by paying €30,000. Ex-director Siegmar Schmidt received a two year suspended sentence from the German court.

La Grange was fined 2 million rand by South Africa's main stock exchange in 2022 for violating listing rules. This primarily related to a handwritten document that was given to him by Jooste, and from which La Grange was told to generate a €23.5 million ($26 million) invoice.