The Johannesburg Stock Exchange (JSE) has barred former Steinhoff International Holdings CEO Markus Jooste from directorships for 20 years and imposed two R7.5 million fines for breaching listing rules and submitting false financial statements.
Tuesday’s decision comes nearly five years after the company nearly collapsed and is the second censure of directors at the company after former Chief Financial Officer Ben la Grange was fined R2 million rand.
Accounting fraud
The accounting scandal emerged after Jooste resigned amid an investigation into accounting irregularities.
Steinhoff allegedly inflated the company’s profits and assets by more than R100 billion between 2009 and 2017, and tricked several investors into placing assets in the company.
At the time, Steinhoff’s share price fell 90% in a week, wiping more than R200 billion off the JSE.
JSE decision
The move by the JSE for two incidents and follows a fine against the company in 2020.
The JSE said Jooste is the company’s top executive and is primarily responsible for management decisions and actions.
“For these reasons, the JSE has decided to impose a public condemnation and a maximum fine of R7 500 000 for Steinhoff’s consolidated financial statements for 2015 that do not comply with the IFS and Listing Requirements and are untrue, false and misleading in material aspects.”
“A public censure and a maximum fine of R7 500 000 for Mr. Jooste’s violation of the Listing Conditions of Steinhoff at Work Transaction; and immediate disqualification from holding the position of director or officer of the listed company for a period of 20 years for failing to perform his duties and responsibilities as Chief Executive Officer with the necessary care and skill,” said JSE.
Also read: Steinhoff’s Jooste to go on trial in Germany next year for fraud
Jooste to fight again
The JSE said Jooste disagreed with its decision and challenged the findings.
“Mr Jooste has informed the JSE that he disagrees with the JSE’s decision and findings and that he intends to exercise his right to challenge the JSE’s decision on the provisions of the Financial Sector Regulation Act (FSRA).”
The JSE said that “on 14 December 2022, Jooste applied to the Financial Services Tribunal for an order to suspend the JSE’s decision.
On the same day, Jooste also applied for reconsideration of the JSE’s decision in terms of section 230(1) FSRA”.
The JSE opposed Jooste’s suspension and reconsideration application.
“On January 10, 2023, the Deputy Chairman of the Financial Services Tribunal, Retired Judge Harms, rejected the suspension application, except in respect of the payment of the fine imposed by the JSE on Mr Jooste,” he said.
Trial in Germany
Jooste is also on trial in Germany in 2023 on charges of accounting fraud brought against him by German prosecutors while the case against two former Steinhoff executives, who live in Germany, will begin on May 3.
Meanwhile, Steinhoff is still waiting for a court date to recover R850 million from Jooste after launching a civil case to recover money paid in salaries, bonuses and other incentives to la Grange.
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