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Less than 24 hours following the passing of South African businessman and former Steinhoff CEO Markus Jooste, the Financial Sector Conduct Authority (FSCA) has reaffirmed its determination to continue its investigation into the Steinhoff scandal, emphasizing that Jooste’s demise will not impede its pursuit of justice.
The Authority also reaffirmed its intention to recover a substantial penalty of $25 million imposed on Jooste from his estate. In an official statement released on Friday, the FSCA asserted, “The investigation will continue as there are other investigated parties involved. The Authority will also continue to assist the Hawks and the National Prosecuting Authority (NPA) with any investigations they may have underway.
As the penalty on the late Jooste in his personal capacity was already imposed at the time of his death, his passing does not impact the penalty. The FSCA is legally entitled to recover the penalty from the estate of the late Jooste. Whether the Authority will claim against the estate will be decided at the appropriate time, taking into account all the relevant circumstances.”
Jooste’s untimely demise: FSCA’s stance on Steinhoff misconduct
This announcement comes in the wake of Jooste’s tragic demise, which occurred on Thursday, a day after the FSCA levied a penalty of R475 million ($25 million) against him. This penalty was imposed following the Authority’s conclusion that Jooste contributed to the publication of misleading or deceptive financial statements related to Steinhoff. The scandal, which unfolded in 2017, rocked the corporate world, revealing widespread accounting irregularities within Steinhoff, a multinational retail corporation.
Jooste, once a prominent figure in South Africa’s business landscape, died at the age of 63 by suicide in his residence in Hermanus, South Africa. His passing has sent shockwaves through the country’s business community, marking a tragic end to a career marred by legal battles and financial scandals.
With a reported net worth of $400 million in 2015, Jooste saw his journey from corporate titan to pariah marked by allegations of accounting fraud during his tenure as CEO of Steinhoff. His involvement in the company’s global expansion turned sour amidst accusations of financial mismanagement, ultimately leading to his downfall and the collapse of Steinhoff.
FSCA takes strong action against Jooste in Steinhoff investigation
The FSCA’s recent penalty against Jooste, totaling R475 million ($25 million), includes provisions for reimbursement of investigation costs to the tune of R10 million (R0.53 million). The penalty, slated for payment by April 19, will accrue interest until settled in full. Additionally, the FSCA has initiated criminal proceedings against Jooste in connection with the Steinhoff scandal.
According to the FSCA’s investigation findings, Jooste and Dirk Schreiber were found to have made or disseminated false, misleading, or deceptive statements regarding Steinhoff International Holdings Limited and Steinhoff International Holdings NV. These statements, which omitted material facts, were knowingly or reasonably should have been known as false or deceptive.
While Jooste faces significant penalties, Dirk Schreiber, former CFO of Steinhoff Europe, avoided financial sanctions from the FSCA due to his cooperation with the investigation into the company’s accounting irregularities. The FSCA exempted Schreiber from administrative penalties citing his extensive cooperation.
