Steinhoff still struggling to recoup R600m from disgraced Jooste
Firm asks high court to compel former CEO to pay back the money
Four years since the fall from grace of former Steinhoff boss Markus Jooste, the group is still scrambling to recoup millions of rand it paid him while he presided over the country’s biggest fraud scandal.
Steinhoff Africa has asked the Cape Town High Court to compel Jooste to pay back R600-million and the former chief financial officer Ben la Grange R234-million. The amounts were paid between 2009 and 2018 to Jooste, and 2015-2018 with regards to La Grange.
Steinhoff’s subsidiaries Luxembourg-based Steenbok Newco and Ibex Retail Investments, which are listed as fourth and fifth plaintiffs in the lawsuit, are demanding nearly €20-million (about R361-million) from the two.
The companies allege that Jooste and La Grange misrepresented to the Steinhoff companies that their financial statements accurately reflected the true financial position of the business and remunerated them under that understanding.
However, the case hit a snag after judge Matthew Francis ruled that Steinhoff Africa Holdings (third plaintiff), Steenbok and Ibex had provided “insufficient facts” in support of the allegation that Jooste and La Grange owed them.
“A party claiming economic loss is expected to know at the pleading stage, the material on which he/she relies to establish wrongfulness … this is a material omission in the particulars of claim,” reads the judgment handed down three weeks ago and seen by Sunday World.
“The plaintiffs are given leave to cure the aforesaid defect in their particulars of claim by filing a notice of amendment to be delivered within 20 days of the date of this order.”
Steinhoff, in a written response from its investor relation team, said: “In terms of our policy we do not comment in the media on ongoing legal processes.”
Jooste and La Grange could not be reached for comment. Jooste has only commented on the allegations against him in 2018, before legislators, where he washed his hands off the near demise of Steinhoff, blaming audit firm Deloitte and a business partnership with a certain Andreas Seifert.
Jooste’s sudden resignation from Steinhoff on December 5 2017 was followed by a protracted controversy concerning Steinhoff’s accounting practices in its central European business dating back years.
In 2019, Pricewaterhousecoopers (PWC) released a damning report that pointed to Jooste and other directors who, it said, had recorded income from fictitious and/or irregular transactions between the 2009 financial year and 2017.
PWC said the fraud saw the group’s profits inflated by €6.5-billion in the period. Sunday World has calculated that the company reported combined profits of R74.7-billion during the period.
Steinhoff is now valued at just under R10-billion, down 96% of its 2017 high.
In addition to committing fraud, Jooste is also accused of insider trading with the Financial Sector Conduct Authority fining him R123-million for breaching the Financial Markets Act for sending a text message to three people in his inner circle days before the scandal became public that the share price of Steinhoff stock would soon plummet and that they must sell their shares.
Aeon Investment Management chief investment officer Asief Mohamed said Jooste and his Steinhoff colleagues should be facing severe consequences for their misdemeanours.
“This would have served as a potential deterrent to any other individual who may want to carry on misdeeds.
Excessive and unjustified remuneration of business leadership is another form of such dishonest behaviour by business, which encourages growing inequality and sets a bad example to government and civil society organisations, which duly follow or are forced to follow the trend set by business,” Mohamed said.
“The National Prosecution Authority
In addition to committing fraud, Jooste is also accused of insider trading
[NPA] under the ultimate leadership of our president has been terribly disappointing when it comes to high profile crimes.
Jooste and Co alleged misdeeds also saw Stellenbosch tycoon Christo Wiese lose his spot as the country’s richest man. In 2015, Wiese decided to sell his Pepkor stake to Steinhoff and he became Steinhoff’s chairperson in 2016. He resigned after Jooste left.
Wiese has filed a lawsuit against Steinhoff to recover his losses.
Hawks spokesperson, Brigadier Nomthandazo Mbambo said: “There is a progress on the case as investigations are still going on, however we cannot disclose more details on the case at this stage.”