The baffling scandal regarding the South African retail company, Steinhoff International Holdings has caused a massive breakdown with investors and banks. Many said that the company should have held responsibility in acknowledging the events that would lead up to the accounting scandal, and now, everyone is trying to find who is to blame for this collapse?
While there are certainly massive downfalls of every part of Steinhoff, Sygnia Chief Executive, Magda Wierzycka said that they are all aware of the accounting fraud and the possibility of tax fraud. The Steinhoff scandal is the largest corporate failure that has been presented to South Africa. The majority of the impact of the scandal will be directed to the funds themselves.
The magnitude of this scandal will ultimately send the pension fund industry into a deep spiral. But what South Africa wants is that the members that are responsible for the events of the Steinhoff scandal will be locked down and to be dealt with harshly as those who have broken law must not reflect on the country to be viewed as one that has bankrupt the society.
The effects of the Steinhoff news on the scandal could also heavily affect investors as well as the investment funds. How do scandal is recreating the image of South Africa has made foreigners look at the country and say demeaning things towards the country and the government. Magda continued her statement by saying that if companies had poorly organised the state-owned enterprises like what Steinhoff has been doing for the past few years, and then eventually becoming the riskiest company to be invested to, which will ultimately lead to the country being unable to access funds for the economy to grow and develop, resulting in a tragedy for South Africa.