SOUTH Africa and the world woke up to shock when the news of embattled businessman Markus Jooste emerged after police confirmed that he allegedly took his life a day after the Financial Sector Conduct Authority (FSCA) imposed a R475 million administrative fine on Jooste for accounting irregularities at the company.
Much like troubled businessman Gavin Watson, Jooste’s movie-like death has left many unanswered questions.
Watson mysteriously died in a car accident early on August 26, 2019, when the company vehicle he was driving struck a pillar on an approach road leading to OR Tambo Airport. Like Jooste, nobody saw his body after he died.
Like many other fallen “heroes”, the once-respected powerhouse business mogul Jooste had his fair share of both success and failure, but now what’s left is to recall how his actions negatively impacted the country when his fraudulent activities were unearthed costing South Africa’s Public Investment Corporation close to R200 billion of investments.
The rise of Jooste
After he was appointed chief executive of Steinhoff International, Jooste transformed the South African manufacturer into “Africa's Ikea” and the second-largest household goods retailer in Europe.
In 2014, Steinhoff International agreed to purchase Pepkor Holdings for more than $5.7bn, adding clothing to the furniture retailer's inventory. Jooste had joined Steinhoff in 1988 after engineering the sale of a South African retail chain to Steinhoff's German owners.
Teaming up with serial investor Christo Wiese in 2014, they went on an aggressive international expansion programme. The conglomerate's stock reached its highest point in March 2016, bolstering their approach of funding dividends and acquisitions through stock sales. However, this was short-lived before everything went south.
Steinhoff heist: Jooste’s fall
After a disagreement with their business partner Andreas Seifert, European regulators, journalists, and law enforcement became aware of the conglomerate's exaggerated profit and asset values, as well as undisclosed deals with third parties outside the balance sheet. This prompted Deloitte LLP to request an internal investigation before approving the 2017 financial statements.
However, Jooste resisted this demand and needed help convincing the Steinhoff board to appoint new auditors. Jooste submitted his resignation on December 5, 2017, followed by Wiese nine days later when a large investor, PIC, called for independent oversight.
Jooste's resignation was followed by an involved and protracted controversy concerning Steinhoff's accounting practices in its Central European business dating back to 2014.
The uncertainty saw some R160 billion of Steinhoff's value wiped off the markets in a matter of days, with continuing losses as the situation unfolded – leading to Steinhoff's demise in 2023.
Among other probes, PwC investigation directly linked Jooste and his chief financial officer Ben la Grange to widespread fictitious transactions and accounting irregularities resulting in the company claiming R870m from Jooste and R272m from Ben la Grange in a summons lodged at the Cape Town High Court, which aimed to recoup salaries as well as bonuses.
According to reports, some journalists contend that insider trading had occurred since Steinhoff's listing in 1998 and that the company's top brass had acted on both sides of several deals. Leveraged Steinhoff shares served as currency to reimburse third parties, while shareholder value was diluted to acquisitions in which Jooste and a circle of associates had allegedly acquired prior stakes.
The Directorate for Priority Crimes Investigations (known as the Hawks) investigative unit conceded to making no progress at all, while the National Prosecuting Authority (NPA) lacked the in-house skills to address crimes of this nature, and criminal charges were not forthcoming.
A day before his death, FSCA imposed an R475 million administrative fine on Jooste for accounting irregularities at the company.
But before the FSCA penalty, after Deloitte confirmed that Steinhoff had falsified its financial statements, the JSE fined Jooste about $880 000 for violations of its listing regulations while the SARB in 2021 seized assets worth up to R1.4 billion from Steinhoff and from Jooste’s family trust.
Jooste was also barred from holding office in listed companies for a period of 20 years.
Jooste’s Chaotic Economic Impact on South Africa
The Steinhoff crash wiped more than R200bn off the JSE and pension funds of millions of people took a massive hit. When it was exposed as a house of cards, tales of fraudulent accounting, lavish spending, and ructions in the “Stellenbosch mafia” made the headlines.
The outrageous impact on pension funds caused some South African legislators to express dismay at the lack of prosecution, and some demanded arrests of the culpable parties without delay.
Despite all the evidence of shocking corruption, Jooste’s bank accounts remained open as South African banks aided Jooste and decided not to act.
Unanswered questions: Jooste’s mysterious death
According to the police report, Jooste died by suicide, however, police could not respond to questions about Jooste’s death.
This has left many wondering if this could be another Watson’s strange death where his death was only confirmed by some media house while his body was never seen.
Western Cape police spokesperson Malcolm Pojie did not respond to questions from the Sunday Independent by the time of publication.
The publication sought to establish which mortuary was Jooste’s body kept in; whether any of the police saw Jooste’s body, how many officers were at the scene, and whether pictures of his body were taken by the police.
thabo.makwakwa@inl.co.za