JSE bars Steinhoff’s Markus Jooste for 20 years, fines him R15m

The Johannesburg Stock Exchange (JSE) has barred former Steinhoff International Holdings CEO Markus Jooste from directorships for 20 years and imposed two R7.5 million fines for violating listing rules and submitting false financial statements.

The decision on Tuesday comes almost five years after the firm’s near collapse and is the second censure of a director at the company after former Chief Financial Officer Ben la Grange was fined R2 million rand.

Accounting fraud

The accounting scandal emerged after Jooste resigned amid an investigation into accounting irregularities.

Steinhoff allegedly inflated the value of the company’s profits and assets by more than R100 billion during 2009 and 2017, and tricked several investors into placing their assets within the company.

At the time, Steinhoff’s share price plunged by 90% in a week, wiping over R200 billion off the JSE.

JSE decision

The move by the JSE is for two incidents and follows a fine against the company in 2020.

The JSE said Jooste was the highest-ranking executive in the company and bore ultimate responsibility for the decisions and actions of management.

“For these reasons, the JSE has decided to impose a public censure and the maximum permissible fine of R7 500 000 for Steinhoff’s consolidated financial statements for the 2015 which did not comply with IFS and the Listings Requirements and was incorrect, false and misleading in material aspects.”

“A public censure and the maximum permissible fine of R7 500 000 for Mr Jooste’s breaches of the Listings Requirements in respect of the Steinhoff at Work Transaction; and immediate disqualification from holding the office of a director or officer of a listed company for a period of 20 years for failing to fulfil his duties and responsibilities as the Chief Executive Officer with the necessary due care and skill,” the JSE said.

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Jooste to fight back

The JSE said Jooste does not agree with their decisions and has challenged the findings.

“Mr Jooste informed the JSE that he does not agree with the JSE’s decision and findings and that he intended exercising his rights to challenge the JSE’s decision in terms of the provisions of the Financial Sector Regulation Act (FSRA).”

The JSE said that “on December 14, 2022, Jooste applied to the Financial Services Tribunal for an order suspending the decisions of the JSE.

On that same day, Jooste also applied for the reconsideration of the decisions of the JSE in terms of section 230(1) of the FSRA”.

The JSE opposed Jooste’s suspension and reconsideration application.

“On 10 January 2023, the Deputy Chairperson of the Financial Services Tribunal, Retired Judge Harms, dismissed the suspension application, other than in regard to the payment of the fine that the JSE has imposed on Mr Jooste,” it said.

Trial in Germany

Jooste is also facing trial in Germany in 2023 on charges of accounting fraud laid by German prosecutors against him while a case against two former Steinhoff executives, who are living in Germany, is set to begin on 3 May.

Meanwhile, Steinhoff is still waiting for a court date in its bid to recoup R850 million from Jooste after it launced a civil case to recoup money paid in salaries, bonuses, and other incentives to la Grange.

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