Disgraced South African businessman Markus Jooste, the former CEO of Steinhoff International, is facing a large fine and a long-term ban from serving as a director as a result of his role in South Africa’s largest-ever accounting scandal, which led to Steinhoff’s current financial difficulties.
The Johannesburg Stock Exchange (JSE) levied two fines of R7.5 million ($441,000), totaling R15 million ($882,000) on the South African businessman, and barred him from serving as a director for two decades, citing failures at the helm that led to Steinhoff’s accounting scandal.
The disgraced South African businessman was found to have violated listing requirements by releasing financial statements that contained incorrect, false, and misleading statements, according to the JSE. He was also found guilty of creating a fictitious invoice that inflated Steinhoff’s income.
Steinhoff’s accounting practices have been the subject of debate since 2014. Insider trading in Steinhoff dates back to its initial public offering in 1998, according to people familiar with the group’s operations, and Jooste acted on both sides of several transactions.
Jooste’s involvement in Steinhoff’s accounting scandal and abrupt resignation in December 2017 caused a sharp drop in the company’s share price, wiping out many people’s investments and livelihoods. The company still owes more than $10 billion in debt and is attempting to reach an agreement with its creditors that would result in them owning the majority of the company and delisting.
The JSE has stated that it is opposing Jooste’s challenge, but the ruling means that it will be able to publicly censure him and bar him from holding any directorships.
In addition, the disgraced South African businessman is scheduled to stand trial in Germany in 2023 on charges of accounting fraud. The charges stem from the PwC forensic report that discovered top executives at Steinhoff overstated profits.
Markus Jooste’s fall from grace is particularly striking given that in 2016, he was reported to be one of Africa’s richest people, with a net worth of $400 million. He is currently the face of South Africa’s biggest corporate scandal despite his challenge.
