The Investment Committee of the Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) are “deeply concerned” about the collapse of Steinhoff and believe it points to “serious governance challenges”.
“The GEPF and PIC believe that now‚ more than ever‚ the Steinhoff matter makes a case for the need to rotate auditors and long-serving board members in investee companies‚ an issue that the PIC has continuously raised.”
The GEPF and the PIC met on Tuesday to discuss Steinhoff.
Steinhoff’s share price dropped from R46.60 at close of trading on Tuesday last week to just R6 on Friday. The company has reported a missing R100-billion in their European operations.
GEPF said their portfolio remains “financially healthy‚ because of its diversified nature”. The GEPF portfolio recorded a total loss of 0.6% on December 6.
“Despite the fall in Steinhoff shares‚ the total GEPF equity portfolio had created a value of approximately R140-billion over the preceding 12 month period‚ and had performed better than the equity benchmark.”
They want Steinhoff and Steinhoff Africa Retail (STAR) to appoint at least two independent non-executive directors on their boards. They also want to highlight “their discomfort with the lack of independence of the Board”.
“The PIC has previously pointed out structural issues relating to the material shareholding of the Steinhoff and (Christo) Wiese families‚ which are perceived to create the dominance of controlling shareholder representatives on the Board and as a result‚ potential conflicts of interest.”
The GEPF and PIC want representation on the committee set to investigate Steinhoff.
The PIC said it previously tried to use its position as a major shareholder to vote against some of the resolutions tabled at Steinhoff annual general meetings.
“The reality is that the PIC is only one amongst many shareholders who have voted differently on certain resolutions.”