Who is the ‘boytjie’ who sank Stein­hoff?

Lit­tle known by pub­lic about reclu­sive bil­lion­aire and avid race­horse owner

The Herald (South Africa) - - FRONT PAGE - Kyle Cowan and Ann Crotty

MARKUS Jooste, the bil­lion­aire face of South Africa’s big­gest-ever cor­po­rate scan­dal, grew up in the world of horse rac­ing and gam­bling. This week, his own bets turned to dust when he was forced to re­sign as chief ex­ec­u­tive of Stein­hoff In­ter­na­tional hours be­fore R194-bil­lion of value – al­most its en­tire mar­ket cap­i­tal­i­sa­tion – in the com­pany he founded was sen­sa­tion­ally wiped out.

In 48 hours, house­hold goods re­tailer Stein­hoff’s losses – against the back­ground of an al­leged ac­count­ing fraud probe by Ger­man in­ves­ti­ga­tors in­volv­ing the value of in­ter­na­tional as­sets and rev­enue – were greater than the es­ti­mated losses to the coun­try in the Gupta-or­ches­trated state cap­ture scan­dal.

Syg­nia as­set man­age­ment chief ex­ec­u­tive Magda Wierzy­cka said this was “as close to a cor­po­rate-struc­tured Ponzi scheme as one can get”.

South African civil ser­vants whose pen­sions are in­vested through the Pub­lic In­vest­ment Cor­po­ra­tion have lost bil­lions.

The PIC’s 8.56% stake is worth just R3.6-bil­lion to­day. Two weeks ago it was worth R20-bil­lion.

It is not just the mil­lion-plus gov­ern­ment em­ploy­ees who will be a lit­tle poorer.

Ahead of this week’s cri­sis, Stein­hoff was one of the 15 largest com­pa­nies on the JSE and was widely held by funds man­ag­ing or­di­nary South Africans’ pen­sions.

The scale of the Stein­hoff scan­dal has thrown Jooste into the broader pub­lic spot­light out­side of cor­po­rate board­rooms.

Who is this man, un­til days ago re­garded as a near-ge­nius en­tre­pre­neur, whose rep­u­ta­tion now lies in tat­ters?

Jooste is an avid horse-rac­ing fan and owns the largest num­ber of thor­ough­bred race­horses in the coun­try.

His sta­ble com­petes in pres­tige events around the world.

At­tempts to de­ter­mine the ex­tent of his East­ern Cape and Nelson Man­dela Bay eques­trian in­ter­ests were stonewalled by in­dus­try mem­bers yes­ter­day.

How­ever, it is be­lieved Jooste em­ploys trainer Tara Laing in Port El­iz­a­beth, where she trains only the fam­ily’s horses.

Laing did not re­spond to calls and mes­sages seek­ing com­ment.

Thu­lani Khany­ile, the deputy chief Stipen­di­ary Stew­ard for the Na­tional Horserac­ing Author­ity in Port El­iz­a­beth, said Jooste was very well known in Bay rac­ing cir­cles and his horses were reg­u­lar par­tic­i­pants here and usu­ally per­formed very well.

Last year, Jooste told BizNews: “My fa­ther was a punter. He worked for the Post Of­fice in Pre­to­ria in Bos­man Street.

“The of­fice where he worked had a Tat­ter­salls right next door.

“On Satur­days, as a young boy, I went with him.

“At the age of 12, I was what you call a run­ner – the guy who ran be­tween book­mak­ers with tick­ets lay­ing off their bets with each other.

“Rac­ing is also my re­lax­ation out­side of my day job.

“If I come into a ho­tel room at 11 at night, I fire up my iPad and watch my horses rac­ing all over the world. That’s when I re­lax.”

He grad­u­ated from Stel­len­bosch Uni­ver­sity as a char­tered ac­coun­tant and com­pleted his hon­ours de­gree at the Uni­ver­sity of Cape Town while fin­ish­ing his ar­ti­cles at a com­pany then owned by business ti­tan Christo Wiese, one of South Africa’s wealth­i­est men – al­though that may have changed this week.

Wiese is now ex­ec­u­tive chair­man of Stein­hoff and is run­ning the com­pany fol­low­ing Jooste’s exit.

As Stein­hoff’s big­gest share­holder, some es­ti­mates are that Wiese lost as much as R37-bil­lion in the col­lapse.

Jooste ran Stein­hoff, which has more than 130 000 em­ploy­ees in 32 coun­tries, for close to 30 years and did not court at­ten­tion, de­spite his wealth and suc­cess.

Giulietta Talevi, writ­ing in the Fi­nan­cial Mail in Oc­to­ber, said: “He might be less reclu­sive than Hol­lard’s Dick En­thoven or Cax­ton’s Terry Mool­man, but en­coun­ter­ing

CEO Markus Jooste in the flesh these days still seems akin to spot­ting the yeti or the Loch Ness mon­ster.

“It’s clear that Jooste, a charm­ing ac­coun­tant with ladies-man ap­peal who also hap­pens to own the largest num­ber of race­horses in the coun­try, doesn’t much like the pub­lic eye.”

A business as­so­ci­ate, who asked not to be named, told The Times: “Very sim­plis­ti­cally, if you want to put it in a South African sense, he’s a lekker boytjie.

“No airs and graces – he doesn’t try to talk with a tof­fee in his mouth.

“He’s got a real gut­tural Afrikaans ac­cent and some­times you want to laugh when he pro­nounces things. “Clearly, it wasn’t all what it seemed.” Lead­ing an­a­lyst and port­fo­lio man­ager Wayne McCur­rie de­scribed Jooste as “a nice guy” who had ob­vi­ously acted un­der se­vere pres­sure.

“What he did you don’t do for the fun of it. You do it be­cause there is pres­sure some­where,” he said.

“They were wor­ried, the banks, they were wor­ried about the loans, they were wor­ried about the share price.

“There was pres­sure some­where for this to hap­pen . . . and of such mag­ni­tude, and not just in the past two months, a very long time.”

McCur­rie said: “If you had asked me last Fri­day, I would have told you I did not think he was ca­pa­ble of this and I didn’t think he was a crook.”

Jooste, in a state­ment to his col­leagues an­nounc­ing his res­ig­na­tion, shoul­dered all the blame for what ap­peared to be a mis­rep­re­sen­ta­tion of as­sets Stein­hoff held over­seas.

McCur­rie said the de­ba­cle was the worst he had ever seen in his 30 years in the fi­nance game, but the effect on “Joe Pub­lic” was likely to be very lit­tle.

“The prob­lem is we just don’t know enough right now. Most of what an­a­lysts are say­ing is spec­u­la­tion based on the very lim­ited in­for­ma­tion avail­able.”

Yes­ter­day, the Cosatu-af­fil­i­ated SA Cloth­ing and Tex­tile Work­ers’ Union – which has thou­sands of mem­bers work­ing at Stein­hoff-owned com­pa­nies such as Pep, Ack­er­mans and Shoe City – said it would call for a meet­ing to en­able the union to re­as­sure its mem­bers.

McCur­rie said much would emerge in the next few months, but it could be years be­fore the scan­dal was put to bed.

Stein­hoff closed at R10 a share yes­ter­day af­ter­noon, down from R50.34 on Mon­day af­ter­noon.

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