How involved was Jooste in Steinhoff’s irregular practices?

Markus Jooste, the former CEO of Steinhoff, claims he was unaware of irregular accounting practices happening at Steinhoff during his tenure as CEO, and as such was not directly involved in it.  

Jooste is currently facing the Financial Services Tribunal after he contested two R7.5 million fines imposed on him for a “violation of the JSE’s listing requirements.”

Unaware

But Jooste says that he was unaware that such requirements were violated.

According to News24, his legal team contended he had placed trust in the information provided by those responsible for overseeing these procedures.

When the chair of the tribunal proceeding suggested Jooste’s defence was simply that he was too high level and was not involved in any of the workings on the ground, his legal team acknowledged there were irregularities in the manner in which Steinhoff was conducting its financial matters.

They suggested the real issue was establishing just how involved Jooste himself was in carrying out these irregular practices.

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Jooste, who stepped down from his role as CEO in late 2017 amid reports of one of the biggest accounting scandals in South Africa, had previously faced a penalty of R162 million imposed by the Financial Sector Conduct Authority (FSCA) due to his involvement in insider trading.

It was alleged that the former CEO sent a text message to four of his friends, advising them to divest their Steinhoff stocks urgently.

Independent investigation

Deloitte’s examination of the company confirmed this. Following his decision to step down, Steinhoff conducted an independent investigation done by PricewaterhouseCoopers (PwC).

The PwC report, which was summarised in March 2019, showed a small group of top Steinhoff executives, led by a senior manager, had been involved in fake and improper dealings over several years.

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These activities were meant to make the company’s profits and assets seem larger than they actually were. The total value of these shady transactions was more than €6.5 billion.

Jooste faced legal action by Steinhoff and was referred to South African authorities. In late 2020, German prosecutors indicted Jooste and three others in connection with the accounting scandal. In October 2022, the South African Reserve Bank seized Jooste’s South African assets.