Jooste’s death won’t affect Steinhoff investigation

The death of Markus Jooste will not affect the FSCA’s investigation relating to Steinhoff, the Authority said on Friday.

“The investigation will continue, as there are other investigated parties involved. The Authority will also continue to assist the Hawks and the National Prosecuting Authority (NPA) with any investigations they may have under way,” the FSCA said in a statement.

The South African Police Service (SAPS) said Jooste, 63, shot himself on Kwaaiwater Beach (pictured) in Hermanus on Thursday afternoon. The place where Jooste took his life is about 2km from his home.

“The deceased succumbed to a fatal gunshot wound to the head shortly after arrival at a private hospital. We can confirm that Hermanus SAPS opened an inquest docket for investigation,” said Western Cape SAPS spokesperson Lieutenant Colonel Malcolm Pojie said.

The Authority said Jooste’s death will also have no impact on the R475 million fine it imposed on the former Steinhoff chief executive on Wednesday, the day before he reportedly committed suicide.

Read: Markus Jooste fined R475m for publishing misleading Steinhoff financials

“The FSCA is legally entitled to recover the penalty from the estate of the late Mr Jooste. Whether the Authority will claim against the estate will be decided at the appropriate time, taking into account all the relevant circumstances.”

The imposition of the fine followed an investigation which found that Jooste and Dirk Schreiber, Steinhoff’s former European finance chief, made or published false, misleading, or deceptive statements about Steinhoff International Holdings Limited and Steinhoff International Holdings NV in the companies’ annual financial statements and annual reports for 2014 to 2016 and for the 2017 half-year.

Jooste and Schreiber were founded to have contravened section 81(1)(a) and (b) of the Financial Markets Act (FMA).

On Friday, the FSCA said it is continuing with further investigations into similar contraventions of section 81(1)(a) and (b) of the FMA by other individuals.

According to the penalty order, the misstatements involved fabricating operating profits, cash and cash equivalents, goodwill balances, and other financial figures, either by creating transactions with no economic substance or by omitting crucial information required by International Financial Reporting Standards. These misstatements led to an overstatement of operating profits, cash balances, and other financial metrics, giving investors, lenders, and creditors a false impression of Steinhoff International’s financial health and performance.

The Authority decided not to fine Schreiber because he co-operated with its investigation and provided evidence.

In August last year, a court in Germany sentenced Schreiber to three-and-a-half years’ imprisonment after being convicted of accounting violations and aiding credit fraud.

Schreiber is the first person to be jailed for the Steinhoff fraud.

The court in Oldenburg also convicted ex-director Siegmar Schmidt and gave him a suspended sentence of two years. Both Schreiber and Schmidt had their sentences reduced by a year because the investigation took too long, the court said, making Schrieber’s effective sentence two-and-a-half years.

Schreiber was granted leniency because he co-operated extensively with the investigation, a court spokesperson said.

Jooste was also charged in the case but failed to show up in court for his trial in April.

Former Steinhoff executive charged

On Wednesday afternoon, Jooste and Stephanus Grobler, a former Steinhoff executive, were officially notified to present themselves in Pretoria on Friday morning to the Directorate for Priority Crime Investigation (the Hawks). They would then appear in the Specialised Commercial Crimes Court for a bail hearing.

SAPS spokesperson Brigadier Thandi Mbambo said the Hawks and the NPA had secured warrants of arrest against Jooste and Grobler.

Brig. Mbambo said South Africa’s “exit routes were secured” before Jooste and Grobler’s legal teams were told on Wednesday that their clients needed to appear in court, to prevent them from leaving the country.

She said Jooste would have faced charges of fraud, racketeering, and contravention of the FMA.

According to BizNews, Jooste had agreed to comply. “He was booked on a flight from Cape Town to Johannesburg on Thursday evening to fulfil the commitment to hand himself over,” it said.

Grobler, 64, handed himself over to the police and appeared in court on Friday for a bail hearing.

The Hawks and the NPA said Grobler was charged with fraud and racketeering.

Grobler, who is the first person linked to Steinhoff to appear in court in South Africa, denied the charges against him, News24 reported.

The State opposed bail but said if bail were awarded, it must be set at R200 000. Counsel for Grobler argued that bail should be R50 000.

Grobler spent the weekend in custody at the Brooklyn police station.

Today (25 March), the court set Grobler’s bail at R150 000. His bail conditions include:

• he reports to the Brooklyn police station on Mondays and Fridays;
• he hands over his two passports to the investigating officer and does not apply for a new one;
• he hands over his two firearms to the SAPS;
• he does not leave Gauteng without informing the investigating officer; and
• he does not interfere with State witnesses.

Magistrate Nicca Setshogoe said the decision to award bail was based on Grobler’s history of co-operation with the investigations conducted by the NPA, the FSCA, the South African Reserve Bank, and PwC.

The matter was postponed to 26 June.

Grobler was the company secretary of Steinhoff International Holdings between 1999 and 2011. He also headed the firm’s legal department, served as treasurer of the Steinhoff Group of companies, and was at one stage the managing director of Steinhoff Europe AG.

He resigned from Steinhoff in February 2018, two months after Jooste stepped down as the Steinhoff fraud was coming to light.

Following his resignation, he continued to work at Steinhoff as part of a short-term consultancy deal. This deal was suspended in August 2018.

In March 2023, Steinhoff took Grobler to court in an attempt to recover about R270m from him. The retailer argued that Grobler was “unjustifiably enriched” by the salaries, bonuses, incentive payouts he received. The case has not yet been finalised.

NPA’s ‘secret legal weapon’

The Daily Maverick reported that the NPA secretly assembled a legal team consisting of highly regarded advocates Michelle le Roux SC, Wim Trengove SC, and Michael Mbikiwa to prosecute the case.

“An insider said the initial plan was for the three advocates to be sworn in by a sitting Judge President on Friday to act as state prosecutors in the Steinhoff case. In terms of section 38 of the NPA Act, National Director of Public Prosecutions Shamila Batohi, in consultation with Minister of Justice Ronald Lamola, asked the private lawyers to offer their services to the prosecuting authority,” the publication reported.

According to the Daily Maverick’s “two insiders”, the plan was for Jooste and his co-accused to face charges linked to the manipulation of Steinhoff’s share price, misrepresentations to the third-party businesspeople with whom he did deals – including Christo Wiese, Braam van Huyssteen, and Jayendra Naidoo – as well as years of misstatements in the company’s annual financial statements.

“There was no reason why the other accused could not and should not still be charged, insiders said, but both highlighted the unfortunate convenience of his erstwhile comrades now having a ‘dead guy to blame for everything’,” the Daily Maverick reported.