Steinhoff International Holdings NV’s former European finance chief, Dirk Schreiber, was handed a 3 1/2 year jail sentence by a German court, making him the first person to be imprisoned over an accounting scandal that led to the near-collapse of the retailer.
(Bloomberg) — Steinhoff International Holdings NV’s former European finance chief, Dirk Schreiber, was handed a 3 1/2 year jail sentence by a German court, making him the first person to be imprisoned over an accounting scandal that led to the near-collapse of the retailer.
The Oldenburg court which issued the verdict on Monday also convicted ex-director Siegmar Schmidt, 64, and gave him a suspended sentence of two years. Both men won a reduction of one year because the probe took too long, the court said, meaning Schreiber, 52, must only serve 2 1/2 years. He was convicted of accounting violations and aiding credit fraud.
Schreiber also won some leniency from judges because he cooperated extensively, a court spokeswoman said. A police investigator told the court earlier on Monday that the probe profited massively from his help. Schreiber is also providing information to the investigations in South Africa, she said.
Former Chief Executive Officer Markus Jooste was also charged in the case but failed to show up in court for his trial in April. Jooste has only appeared once to answer questions about the global retailer’s downfall, when in 2018 he told lawmakers in Cape Town that it originated from a protracted dispute with a former partner.
While Schmidt initially told the court he’d always thought the transactions were valid and that he’d acted on orders from Jooste, he later admitted to certain wrongdoing.
Four of the six counts the two accused were first charged with were dropped because of time limitations. The remaining part of the charges covered fiscal year 2011/2012 when fake profits were booked over fictional asset sales.
The two men were among eight people that were named by the company in 2019 following a forensic probe by auditor PwC that uncovered €6.5 billion ($7.1 billion) of irregular transactions with eight firms over eight years.
German authorities first searched the offices of Steinhoff Europe Group Services GmbH in 2015 — two years before the parent company’s demise — and just before the retailer’s listing on the Frankfurt Stock Exchange.
Those raids in Westerstede, a small town close to Oldenburg in the North of Germany, were based on suspicions certain Steinhoff units may have booked income through sales of assets to other companies which in reality were part of the group. Steinhoff has its roots in the town.
George Alan Evans, who was charged next to Jooste, in April settled his case by paying €30,000.
(Updates with Schreiber’s cooperation in Germany and South Africa in third paragraph.)
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