Former Steinhoff CFO Ben la Grange has been sentenced to 10 years in prison, suspended for five, by the Pretoria specialised commercial crimes court after pleading guilty to one charge of fraud in the Steinhoff saga.
The state argued La Grange was a key figure in the company’s fraudulent activities, accusing him of working with former CEO Markus Jooste and others in “common purpose” to misrepresent Steinhoff’s profits and assets.
La Grange entered into a plea and sentencing agreement, admitting in part to his role in the financial misconduct that contributed to Steinhoff’s collapse, making him the second person convicted in connection with the scandal. He faced nine charges, including racketeering, fraud, falsifying financial statements and failing to report fraudulent activities.
La Grange's sentence depends on his not committing similar offences during the period. The court has separated the trials of La Grange and his co-accused Stéhan Grobler, a former Steinhoff director, who is set to appear on Friday. Both men are accused of playing pivotal roles in the financial manipulation that led to the company’s collapse. La Grange is expected to testify in future Steinhoff trials.
During sentencing, prosecutor Dries van Rensburg acknowledged that while La Grange had shown remorse and was a first-time offender who had assisted authorities and the JSE with their investigations, the seriousness of his crimes could not be overlooked. Van Rensburg said had La Grange acted sooner the damages could have been significantly mitigated.
“Though not the mastermind, he did benefit.”
In the indictment, the state argued La Grange’s involvement in the fraudulent schemes dated to at least June 2013. La Grange admitted to creating and facilitating the creation of falsified invoices amounting to hundreds of millions, which misrepresented the true state of Steinhoff’s financial health between 2014 and 2016. These transactions involved bogus deals with entities such as TG Group, designed to artificially inflate the company’s financial performance, ultimately leading to significant financial losses for investors while benefiting La Grange and others.
The state, in its indictment, characterised these actions as “a systemic, organised and continuous series of fraudulent transactions processed through the SIH and SINV accounting systems”.
Steinhoff Investment Holdings (SIH) is a subsidiary of Steinhoff International Holdings NV (SINV), the Netherlands-based parent company. According to the indictment, these activities formed a pattern of racketeering.
Steinhoff, a global retailer listed in Germany and South Africa, became embroiled in a huge accounting scandal in December 2017. Under the leadership of Jooste, the company overstated its earnings by R100bn through fictitious sales and inflated asset values, deceiving auditors and investors.
This misrepresentation led to an artificial inflation of Steinhoff’s stock price, causing investors to believe the company was more profitable than it was. When the scandal broke, Steinhoff’s share price plummeted by 90%, erasing more than R200bn in market value. The company was liquidated in 2023 and Jooste allegedly took his own life a few months later, avoiding prosecution.
La Grange has consistently distanced himself from the scandal, testifying before parliament in 2018 that he was unaware of the fraudulent activities at Steinhoff and placing the blame on Jooste.
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