The Pretoria Specialised Commercial Crimes Court has sentenced Iwan Peter Schelbert, a former director and board member of Steinhoff at Work, to five years’ direct imprisonment after he was convicted of fraud involving more than R376 million.
Schelbert, 63, from Paarl in the Western Cape, was sentenced on 16 January in terms of section 276(1)(i) of the Criminal Procedure Act after entering into a plea and sentence agreement with the State under section 105A of the same Act, the National Prosecuting Authority (NPA) said in a joint media statement with the Directorate for Priority Crime Investigation (the Hawks).
Schelbert was a director and board member of Steinhoff at Work – a subsidiary that manufactured and distributed furniture – from 1 June 2004 until 29 March 2018.
The Court found that in November 2016, while acting on instructions from then chief financial officer Andries Benjamin la Grange, Schelbert generated a fraudulent invoice to TG Sources SARL, a company based in Martigny, Switzerland. The invoice did not reflect a legitimate transaction.
According to the NPA, once Schelbert issued the invoice, Stephanus Johannes Grobler and others created supporting documentation and caused payments to be effected, which falsely portrayed the transaction as legitimate. This scheme resulted in the inflation of Steinhoff’s financial statements by more than R376m.
The NPA said the investigation and prosecution of this complex matter required extensive collaboration and technical expertise, given the scale and sophistication of the alleged misconduct.
The conviction is the third successful conviction secured in the long-running Steinhoff matter. The cases against co-accused individuals Hein Adendaal, 67, and Grobler, 64, are set to continue, with proceedings postponed to 6 February.
Schelbert’s conviction forms part of a wider set of legal and regulatory actions arising from the discovery in late 2017 of significant accounting irregularities at Steinhoff International Holdings Limited and its subsidiaries.
In March 2024, the Financial Sector Conduct Authority imposed an administrative penalty of R475m on former Steinhoff chief executive Markus Jooste, finding that he and former European finance chief Dirk Schreiber made or published financial statements and annual reports that were false, misleading, or deceptive for the financial years 2014 to 2016 and the 2017 half-year. The FSCA concluded that these published financial statements omitted material facts and misrepresented the company’s true financial position.
Read: Markus Jooste fined R475m for publishing misleading Steinhoff financials
The FSCA found that such conduct violated sections 81(1)(a) and (b) of the Financial Markets Act (FMA) by making or publishing statements that were false, misleading, or deceptive, including the omission of material facts that affected investor and creditor decision-making. These contraventions applied to statements made while the company’s securities were listed on both the Johannesburg Stock Exchange and the Frankfurt Stock Exchange.
In addition to the regulatory penalties, criminal investigations by the NPA and Hawks have continued.
Jooste would have faced charges of fraud, racketeering, and contravention of the FMA, but he committed suicide in March 2024 before facing trial. The investigations also involved asset attachment orders executed by the South African Reserve Bank that included property and accounts linked to associates of Jooste.
Read: Jooste’s death raises questions about the fate of seized assets and Steinhoff prosecution
Nature of the TG Group
Reports analysing the Steinhoff accounting issues have described a broader context in which certain related entities, often referred to collectively as the TG Group, were used to create fictitious transactions that artificially bolstered group revenues, profits, and asset values. These companies – including TG Sourcing Services SARL – served as shell entities with no genuine business activity. The alleged scheme included the generation of non-existent invoices and purported rebates that were recorded as income and artificially inflated reported operating performance.
Read: How the Steinhoff Group propped up its profits
The discovery of the accounting irregularities in 2017 led to a collapse in Steinhoff’s share price, wiping out significant market value and leading to widespread financial losses for investors and retirement funds. PwC was appointed to conduct a forensic investigation at the request of Steinhoff, which took almost two years and resulted in an extensive report made available to investigators.
Since then, several executives have faced criminal charges and regulatory penalties. La Grange, the former chief financial officer whose instructions led to the fraudulent invoice in the Schelbert matter, previously entered a guilty plea in relation to other fraud counts and was sentenced in 2024.
Read: Steinhoff’s fall: former CFO Ben la Grange sentenced
Another associate, former company physician Gerhardus Diedricks Burger, was convicted of insider trading and received a sentence in 2024.
Read: First Steinhoff conviction: insider trader avoids jail but must testify against accomplices
