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VEB takes Deloitte to court for losses incurred by Steinhoff investors

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PRESS RELEASE   VEB takes Deloitte to court for losses incurred by Steinhoff investors  The VEB has summoned Deloitte Accountants to appear before the District Court of Rotterdam for the losses incurred by the Steinhoff shareholders.

Deloitte, incorrectly providing an unqualified auditor’s report on Steinhoff’s financial statements for 2016, seriously failed to fulfil its duties as laid down by law for auditors. Due to the misleading financial statements with Deloitte’s unqualified auditor’s report, Steinhoff investors have incurred losses in the amount of billions of euros.

Prior events
On 6 December 2017, widespread accounting irregularities came to light at Steinhoff. For instance, Steinhoff is unsure of the actual value of over eight billion euros in assets disclosed in its financial statements. With the subsequent plunge of the Steinhoff share price, more than 14 billion euros in market value have now evaporated.

On 13 December 2017, Steinhoff announced that the financial statements for 2016 were to be restated. Deloitte withdrew its unqualified auditor’s report that same day.

It is highly doubtful whether Deloitte had sufficient insight to be able to assess the valuation of Steinhoff’s property, acquired companies and related goodwill, among other items. In addition, it is unclear how the auditor could have approved Steinhoff’s cash position as disclosed in the financial statements.

In his capacity as group auditor, the Deloitte auditor responsible for the Steinhoff audit also failed to apply the appropriate level of professional scepticism in relation to the procedures performed and submitted by other auditors. In view of the wide range of irregularities occurring over many years, questions may also be raised as to the quality of the audit’s transfer from Deloitte & Touche South Africa to Deloitte Accountants B.V. in the spring of 2016.

Trusted party in society
Auditors have a public duty in supporting confidence in the financial markets. Investors must be able to rely on an unqualified auditor’s report in making their investment decisions.

Click here for the European Investors statement about the lawsuit against Deloitte.

More information Should you require more information, please contact Mr Armand Kersten, Head of Relations at VEB/European Investors (akersten@veb.net or 0031 6 2721 9730).

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