Ibex RSA Holdco Ltd and Another v Tiso Blackstar Group (Pty) Ltd and Others 2025 (2) SA 408 (SCA)

On 4 December 2024, the Supreme Court of Appeal (SCA) delivered a landmark judgment in the case of Ibex RSA Holdco Ltd and Another. This judgment underscores the critical importance of transparency and accountability in corporate governance, particularly in the context of South Africa’s largest corporate scandal involving the Steinhoff Group.

Background of the case

The case revolved around access to a forensic report prepared by PricewaterhouseCoopers (PwC) on accounting irregularities within the Steinhoff Group. In 2017, Deloitte, Steinhoff’s external auditors, refused to sign off on the company’s financial statements due to serious irregularities. This led to the commissioning of a PwC forensic investigation, which culminated in a 4 000-page report (the Report). While Steinhoff released an 11-page summary titled ‘Overview of the Forensic Investigation’, it declined to disclose the full Report, citing claims of legal professional privilege under the Promotion of Access to Information Act 2 of 2000 (PAIA).

Tiso Blackstar Group (now Arena Holdings) and the amaBhungane Centre for Investigative Journalism sought access to the full Report, arguing that its disclosure was in the public interest. The Western Cape Division of the High Court agreed and ordered Steinhoff to release the Report. The appeal to the SCA followed.

Key findings of the SCA

The SCA dismissed the appeal, rejecting Steinhoff’s claims of privilege and emphasising the public interest in the Report’s disclosure. Key aspects of the judgment include:

• Legal professional privilege

The court concluded that the dominant purpose of the PwC investigation was not to provide legal advice but to assist Steinhoff in preparing its financial statements for 2017 and 2018. This was based on:

• The Stock Exchange News Service announcement indicating that Steinhoff, in consultation with Deloitte, had engaged PwC.
• PwC’s engagement letter, which focused on analysing allegations of accounting irregularities.
• Steinhoff’s own statements acknowledging the investigation’s purpose to address the financial impact of irregularities and facilitate remedial actions.

Paragraph 74 of the judgment provided detailed reasoning supporting this conclusion. The court highlighted that Steinhoff’s commissioning of the Report involved multiple stakeholders, including auditors and regulatory bodies, to fulfil obligations related to financial disclosures and corporate governance. Additionally, supporting documents revealed that the primary intent of the engagement was to address accounting discrepancies comprehensively, further solidifying the conclusion that legal advice was ancillary rather than central. Notably, Steinhoff’s attorneys stated that they instructed PwC to prepare the Report.

• Waiver of privilege

By publishing the Overview of the Forensic Investigation, Steinhoff effectively waived any privilege attached to the Report. The summary disclosed key findings, including details of fraudulent transactions, methodologies used by perpetrators, and the financial impact on the company.

• Public interest override

The court emphasised that the public interest override in s 70 of PAIA applied. This section mandates the disclosure of records revealing contraventions of the law. The Report highlighted systematic fraud spanning nearly a decade, involving inflated profits and asset values totalling approximately R200 billion. Given the scandal’s devastating impact on pension funds − including the Government Employees Pension Fund − the court deemed disclosure imperative.

The judgment further clarified the threshold for applying the public interest override. As stated in para 95, the ‘balance of probabilities’ test must be met: whether a record would reveal evidence of non-compliance with the law must be more likely than not based on the material before the decision-maker. The SCA found that the evidence in the Report − detailing irregular transactions, fraudulent methodologies, and concealed wrongdoing − clearly met this threshold.

Paragraph 97 reinforced this finding, noting that the public interest in disclosing the Report significantly outweighed any speculative harm alleged by Steinhoff. The court dismissed claims of potential harm to litigation strategies or enforcement actions as superficial and unsubstantiated.

• Rejection of harm claims

Steinhoff’s arguments that disclosure would harm litigation strategies or enforcement actions were dismissed as speculative and outweighed by the compelling public interest in transparency.

Broader implications

The judgment is a significant victory for corporate accountability and transparency in South Africa. It reinforces the principle that legal professional privilege cannot be used as a shield to suppress critical information in cases of public interest. This case also highlights the essential role of investigative journalism in exposing corporate misconduct.

Key legal principles established

• Adoption of the dominant purpose test: The SCA affirmed that litigation privilege applies only when the dominant purpose of a document is to obtain legal advice or for use in litigation. The ‘one of many purposes’ approach, which grants privilege if litigation is merely one of several purposes, was rejected.
• Implied waiver of privilege: Privilege can be waived by actions inconsistent with maintaining confidentiality, as demonstrated by Steinhoff’s release of the summary overview.
• Public interest and transparency: The judgment underscores the necessity of transparency, particularly in cases involving widespread financial harm to investors and pension funds.

Lessons learned

• Transparency is crucial: Corporations must prioritise openness, especially when their actions have a profound financial impact on stakeholders.
• Limits of privilege: Legal privilege cannot be misused to conceal mis­conduct when the dominant purpose of a document is non-legal.
• Role of media: Investigative journalism remains vital in holding corporations accountable and ensuring public awareness of significant misconduct.

Future ramifications

• Legal and Regulatory Impact: The disclosure of the full PwC Report may lead to further lawsuits, criminal investigations, and the exposure of additional participants in the fraud. Regulatory authorities are likely to impose stricter oversight on corporate governance, auditing standards, and board accountability.
• Corporate governance reforms: Companies may strengthen internal controls, compliance programs, and ethical standards to prevent similar scandals.
• Legal precedent: This judgment sets a critical precedent in South African law, clarifying the boundaries of legal privilege and reinforcing the public’s right to information in cases of significant public harm.

Conclusion

The SCA’s judgment in Ibex RSA Holdco Ltd and Another v Tiso Blackstar Group (Pty) Ltd and Others is a landmark decision, championing transparency and accountability in corporate governance. By compelling the disclosure of the PwC Report, the court has ensured that the full extent of South Africa’s largest corporate fraud is brought to light. This case serves as a stark warning to corporations worldwide about the perils of financial misconduct and the inevitability of truth’s exposure. Most importantly, it reinforces the principle that the public interest must prevail in the face of significant harm and malfeasance.

Shwetha Singh BCom Law LLB (IIE) is a candidate legal practitioner in Shepstone & Wylie Attorneys in Durban.
This article was first published in De Rebus in 2025 (May) DR 49.