Ibex settles with bank for R6bn

WRAP UP: DEBT RESTRUCTURING SETTLEMENTS PREVENT UNCONTROLLED LIQUIDATION

- Ina Opperman

The South African Reserve Bank (Sarb) has reached a final settlement with Ibex of R6.3 billion for the Steinhoff fraud after an extensive and complex investigation into the affairs of Steinhoff International Holdings regarding possible contraventions of the Exchange Control Regulations.

After its investigation, Sarb took administrative action against certain entities within and associated with the Steinhoff Group, now known as Ibex, for not complying with the Exchange Control Regulations.

The discovery of the now well-known accounting irregularities in the Steinhoff Group in December 2017, saw the Steinhoff share price fall sharply and immediately on the Frankfurt and Johannesburg stock exchanges, eroding about 90% of the company's market capitalisation.

According to the Sarb, the Steinhoff Group's external debt exceeded €10 billion (about R155 billion) at the time.

The crisis threatened the Steinhoff Group's continued existence and risked consequences, including forced asset sales, or "fire sales", significant losses to South African and foreign financial institutions and investors and extensive job losses.

There was also a risk that it could significantly affect South Africa's reputation as one of the most robust and well-regulated financial markets in the world, Sarb said.