The JSE has imposed two fines of 7.5 million rand against former Steinhoff chief executive Markus Jooste and banned him from serving as director for two decades, due to failures at the helm that sparked the biggest accounting scandal in the SA history.
Jooste informed the JSE that he disagreed with the decision and challenged it, the JSE said in a statement, and the Financial Services Court on Tuesday dismissed the suspension request, except in regards to fines.
The JSE said it opposes Jooste’s impeachment, but Tuesday’s ruling means it is in a position to impose its public censure and ban him from holding senior positions.
The JSE said it had imposed two fines of R7.5 million, the maximum allowed. One is for publishing financial statements that did not meet listing requirements and contained incorrect, false and misleading statements, and the other is for a fictitious invoice that falsely inflated revenue by R376 million.
In August, the JSE fined former Steinhoff CFO Ben la Grange R2 million and banned him from acting as a director of the company for 10 years, in part for processing that fictitious invoice. The handwritten note, allegedly given to La Grange by Jooste, was also used by SA Reserve Bank to convince a court to sign an order seizing Jooste’s assets.
Jooste’s abrupt resignation in December 2017 caused a stock price collapse and has been an existential threat to Steinhoff, who managed to settle multiple lawsuits against him. Despite this, the company still has a debt of 10,000 million euros (185,000 million rand) and is looking to reach an agreement with its creditors so that they own the majority of the company and delist it.
Sasfin Securities chief global equity strategist David Shapiro said it had taken six years for these kinds of sanctions to materialize, adding that it was a complex case with multiple threads, making it difficult for organizations to make hasty decisions.
“I think what happened to me[is that] It has been very difficult for all these organizations [such as the JSE] to impose sanctions against him, challenge him and bring him to order, because the issues around Jooste are very complex and they couldn’t get all the details of the investigations.”
Shapiro said this move by the JSE was a step in the right direction and likely heralded more legal cases, both criminal and civil, likely to be brought against Jooste in the coming years.
“Sooner or later we’re going to see some big cases against him [Jooste]. Now he’s going to spend a lot of time fighting cases and defending himself.”
Casparus Treurnicht, a portfolio manager and research analyst at Gryphon Asset Management, said the JSE would have been forced to follow protocol and conduct its investigation, and that fining and disqualifying Jooste from a directorship were obvious actions to take.
He said these actions were “probably the least of Markus’s concerns.”
Treurnicht said that Jooste would “probably oppose these steps and use delaying tactics for as long as necessary”, adding that this was in keeping with the “character the market might have created for him after everything that happened”.
He said he could not say more because it was a complex matter with multiple unknown factors, adding that the law must take its course.
Steinhoff is still awaiting a court date in his bid to recover R850 million from Jooste. The company has launched a civil lawsuit to recover money paid in salaries, bonuses and other incentives to its former chief executive.
An accounting fraud case brought by German prosecutors against Jooste is also expected to go to trial early this year. A case will begin on May 3 against two former Steinhoff executives, who live in Germany.
This article was updated with additional comment at 18:07 on January 10, 2023.
