Markus Jooste, former CEO of Steinhoff International. Picture: Archive
South Africa’s financial sector watchdog, the Financial Sector Conduct Authority (FSCA) has imposed a hefty fine of R475 million on Markus Jooste, the disgraced former CEO of Steinhoff.
The fine is a significant development in the long, drawn out saga, which comes as a result of Jooste and Dirk Schreiber, Steinhoff’s former European finance chief’s, involvement in publishing misleading financial statements which led to substantial losses for investors, including pension funds.
The fine was announced in a statement released on Wednesday, and comes after an FSCA’s investigation concluded that Jooste, along with Schreiber, who was sentenced to three years in prison by a German court last year, made or published false, misleading or deceptive statements about the company’s financial situation.
READ: Jooste must declare more assets
The statements in question, which included the omission of crucial facts, were found in the financial statements and annual reports of Steinhoff International Holdings Ltd and Steinhoff International Holdings NV for the years 2014 to 2016 and the first half of 2017.
During this period, the company’s securities were listed on the Johannesburg Stock Exchange (JSE) and the Frankfurt Stock Exchange (FSE), amplifying the impact of the misinformation.
READ: Some aspects of Steinhoff fraud case ready for trial – Hawks
The FSCA’s findings indicated that both Jooste and Schreiber contravened section 81(1)(a) and (b) of the Financial Markets Act (FMA), 19 of 2012.
This act prohibits the making or publishing of any false or misleading statements, promises, or forecasts about a company’s past or future performance, especially when the company has listed securities on a regulated market.
The penalty against Jooste includes a R10 million contribution to cover the FSCA’s investigation costs and an interest at a rate of 11.75%.
The FSCA said it considered several factors in determining the penalty, including the need to deter similar misconduct, the significant losses suffered by investors, Jooste’s lack of cooperation during the investigation, and the serious and prolonged nature of the contraventions.
In contrast, Schreiber received leniency due to his extensive cooperation with the investigation.
Their statement reads:
Due to the extent of Mr Schreiber’s co-operation with the investigation and after considering the factors as per section 156 (3) of the Financial Sector Regulation (FSR) Act, the FSCA was satisfied that it appropriately entered into a leniency agreement with Mr Schreiber. In terms of the leniency agreement the FSCA, despite finding that Mr Schreiber contravened section 81(1)(a) and (b) of the FMA, will not impose an administrative penalty on Mr Schreiber. The authority is satisfied that it may publish the leniency agreement as per section 156(4) of the FSR Act.
Previously, Steinhoff International faced a R1.5 billion fine, which was later reduced to R53 million upon the company’s application.
The fine was paid before Steinhoff International transitioned into a new private Dutch holding company at the end of 2023.
The FSCA said it is still continuing its investigation into similar contraventions by other individuals involved in the scandal.
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