ARKUS JOOSTE LEFT UNTOLD
Should be put into context. R3bnwith the implosion of the company’s share price. But this number
imploded, these creditors suddenly discovered that Jooste had tricked them. All that was left of Mayfair Speculators by 5 December 2017 was a few small assets and millions of Steinhoff shares, which were worth virtually nothing.
But what happened to all the assets that had accumulated in Mayfair Speculators over the years? When the mentioned institutions made loans to Mayfair Speculators, there were many assets on its books. Among others, it included a share portfolio consisting of Steinhoff shares, shares in a number of smaller companies such as a plastics manufacturer, an interest in a number of race horses, and a 49% interest in the Klawervlei stud farm.
But in August 2017, three months before Steinhoff’s share price collapsed, Jooste and Potgieter declared an enormous dividend in specie in Mayfair Speculators to Mayfair Holdings, the holding company. In this case, houses, other property developments, interests in other businesses and about R200m in cash were issued as dividends to Mayfair Holdings, of which Jooste and Potgieter were the only directors.
The total value of the assets issued was R1.5bn.
According to minutes of Mayfair Holdings’ meeting in August, which were seen by this writer, these were issued as an “attempt at restructuring”. These minutes were signed by Jooste and Potgieter.
After Jooste and Potgieter stripped Mayfair Speculators of most of its assets, mainly Steinhoff shares remained in the company and by 5 December 2017 these shares were virtually worthless.
After the massive asset stripping in August, Mayfair Speculators went on a begging spree to banks at the end of November to borrow even more money. At the end of November, Potgieter asked Investec to increase Mayfair Speculators’ credit facility just days before his father-in-law resigned.
Investec granted an amount of R93.4m and paid it over to Mayfair Speculators at the end of November 2017. The security for the additional debt was still the Steinhoff shares.
Absa, Investec and Sanlam subsequently Former chief financial officer of Steinhoff Former chairman of Steinhoff made an application to the High Court in Cape Town in December 2017 to have Mayfair Speculators liquidated.
In court documents, Absa accused Jooste and Potgieter of fraud, but did not institute criminal proceedings.
“Both Potgieter and Jooste must have been aware of the fact that the implosion of the Steinhoff share price was inevitable,” Absa stated in its court papers. In an affidatvit, Investec’s senior legal representative, Avrom Krengel, also said that Jooste and Potgieter must have been aware of the inevitable collapse of the Steinhoff share price when they made further loans at Investec.
“They deliberately kept the information from the bank.”
On 25 April the court was asked to withdraw the liquidation application after the parties settled out of court. Absa says in a lawyer’s letter submitted to court that the creditors and Mayfair companies had reached an agreement which involved, among other things, the orderly sale of the assets of Holdings and Speculators to ensure maximum value for creditors.
The agreement furthermore stipulates that the debt should be paid in full by December 2018.
These issues will hopefully form part of the continuing investigations being undertaken.
PwC’s in-depth forensic investigation, specifically to resolve matters, will at best only be completed at the end of the year. The Hawks and other investigators in Germany and the Netherlands are apparently still finding their way in the dark, waiting for the PwC investigation to be completed.
Meanwhile, it’s a remarkable achievement that the larger Steinhoff group remains operational with more than 12 000 shops globally, despite the enormous destruction of value and lack of financing caused by the crisis.
The Steinhoff share price is currently trading at about R2.40/share compared with R64.40/ share a year ago. ■ email@example.com
is the author of
(LAPA publishers), which appeared earlier this year. To win a copy of this book, you can send an email to firstname.lastname@example.org and use STEINHOFF as the subject line.
Ben la Grange