Steinhoff saga: Odendaal was negligent in role as audit executive, say prosecutors

Prosecutors in the Steinhoff accounting scandal said the group’s audit executive, Hein Odendaal, was negligent in his role because he should have suspected fraud by other employees but failed to report the matter to the police.

On Thursday, the Pretoria Specialised Commercial Crimes Court sentenced Odendaal to a R2 million fine or four years' imprisonment.

This, after he pleaded guilty to failing to report fraud involving fictitious income that resulted in misleading audited financial statements.

The court also imposed an additional two-year prison sentence, wholly suspended for five years.

The five-year suspended sentence is on the condition that Odendaal is not convicted for contravening parts of the Prevention and Combating of Corrupt Activities Act (PRECCA) during the period of suspension.

He will also undergo one year of correctional supervision.

The case stems from a 2016 scheme when Iwan Peter Schelbert, acting on instructions from then-CFO Andries Le Grange, generated a fraudulent invoice to a company based in Switzerland.

They then processed payments to make it appear as though the invoice represented a legitimate transaction between Steinhoff and the company.

The fraud resulted in Steinhoff’s financial statements being inflated by more than R376 million.

All of this was part of a R106 billion fake money scheme orchestrated by Marcus Jooste, who took his own life when it was clear he was likely going to face charges and possibly jail time.

Author of the book Steinheist and the Grand Scam, and editor of Currency News Rob Rose, weighed in on Odendaal’s conviction.

“For years, there was widespread scepticism that anyone would be held criminally accountable for the collapse of the retail giant. That doubt grew stronger after former Steinhoff CEO Marcus Jooster died before he could face criminal charges.”

While convictions have so far been secured in South Africa and Germany on the matter, the trial of former Steinhoff treasurer Hendrik Grobler is set to proceed in May.