The Steinhoff story does not end with Jooste’s suicide, but it did begin with weak corporate governance

Dear DM168 reader,

In just one week, the flotsam and jetsam of South African avarice, hubris and perfidy have washed up on the shores of our digital devices, reminding us of the gargantuan David-and-Goliath battle our warriors for justice and fiduciary oversight are up against.

Since the discovery seven years ago that Markus Jooste cooked the books of Steinhoff - the German, Dutch and South African furniture and household goods company - it had seemed that the meneer from Stellies with a Midas touch was untouchable.

But as my colleague Neesa Moodley reported on Wednesday, the Financial Sector Conduct Authority fined Jooste R475-million, announcing its intent to initiate a criminal case against him.

Pauli van Wyk also reported that the NPA was lining up a team of ace prosecutors to confront Jooste and his co-accused with charges linked to manipulation of Steinhoff’s share price, misrepresentations to businesspeople he did deals with and years of misstatements in the company’s annual financials. Jooste was meant to present himself for arrest on Friday, 22 March.

Instead, he took a stroll from his Voëlklip mansion in Hermanus along the cliff path and shot himself, leaving his wife Ingrid and three children, his family, friends and accomplices to pick up the pieces.

Those who dubbed Jooste the darling of the stock exchange were blinded by dazzling dollar signs in their eyes. The boykie who ostensibly could do no wrong when it came to making the rich richer was listed in Forbes Africa’s 2015 rich list with a net worth of $400-million. At the average exchange rate at R13 to the dollar in 2015, that would have made his net worth a cool R5.2-billion – enticing for those who measure their worth by mansions, mistresses, cars, polo ponies, wine farms, million-dollar entertainment and those dollar signs while turning a blind eye to hogwash.

Read more in Daily Maverick: The Steinhoff scandal

But German authorities caught on to the ruse and started investigating. On 5 December 2017, Jooste resigned after the company announced accounting irregularities, crashing the Steinhoff share price by more than 90% as it was revealed that he overstated profits and assets by nearly $12-billion. The plunge laid bare capitalism at its worst, a hollowed-out kind of Ponzi scheme based on hot air.

What’s wrong with a bit of hoopla, overstating your company’s worth and pretending it’s all on the up and up when it’s actually going pear-shaped? Well, the livelihoods of pensioners, for one, as pension funds, including the massive Government Employees' Pension Fund (GEPF), were eviscerated by the crash.

As Linda Ensor wrote on BusinessLIVE in 2018, the GEPF held 428 million shares in Steinhoff with a market value of R24-billion at the end of November 2017. On 23 January 2018, after the collapse, the GEPF held 392 million shares with a market value of R3-billion. That’s a lot of livelihoods down the tube.

James-Brent Styan – the author of Steinhoff: Inside South Africa’s Biggest Corporate Crash – told EWN many lives were destroyed by the company’s collapse: “I'm even aware of people [who] took their own lives as well at the time, and shortly thereafter, because of the complete devastation that happened in their lives [caused] by the Steinhoff crash.”

The Steinhoff story is a tragedy that does not end with Jooste’s suicide, but it began with the licence he was given by weak corporate governance to loot and live large.

Another rogue who was, sadly, given a licence to loot and live large by the majority of South African voters, who handed him the keys to the kingdom in two successive elections, is alive and well, and lording it up as the last of The Untouchables.

He who told us that the ANC will rule till Jesus returns is parading around singing Umshini Wami for the MK party, which is sweeping up support from the gullible and the greedy who think the Zunami will usher them into another decade on the gravy train.

On 16 March, at The Maslow in Time Square in Pretoria, Jacob Zuma regaled a crowd of well-to-do Afrikaners gathered by diamond dealer and alleged Ponzi schemer Louis Liebenberg. Liebenberg – and Lord only knows who else is funding the MK party – must think their hunt for more filthy lucre will be blessed by sweating the 82-year-old conservative, Constitution-hating asset.

What did the patriarch have to say to the attentive Afrikaner crowd? If you read between the lines, it went something like this:

“Don’t worry, we won’t kill you, even though we are stuck in a time warp from more than three decades ago when the AK-47 was a symbol of our manhood, aka our freedom. Never mind that it was not the armed struggle that won our liberation but economic sanctions, mass protest by the people and a negotiated settlement.

“I like to believe that waving this gun and getting you to sing Umshini Wami makes me virile and macho, and scary enough to convince you we won’t shoot you or loot if you support me with your millions like my friends Louis, Schabir, Rajesh, Tony and Ajay, and look the other way while I fleece the country so my wives and children can live it up in Dubai and Nkandla, and wherever the hell they fancy, as long as they worship me as uBaba.”

Actually, that’s my interpretation. His own words can be found in this News24 report. Sadly, JZ is going to need more Liebenbergs backing him as his bank, FNB, was instructed by the KwaZulu-Natal Division of the High Court to place a hold on outgoing payments from all his accounts to comply with the VBS liquidators as Zuma owes them R6.5-million, with interest at the rate of 10.5%.

The good news is that Zuma’s Stalingrad tactics to avoid his day in court for more than two decades might just be nearing their end. On Wednesday morning, Judge Nkosinathi Chili said the former president had failed to show that Billy Downer’s presence as his prosecutor would violate his right to a fair trial.

On Tuesday, the long arm of the law also reached Parliament as investigators raided Speaker Nosiviwe Mapisa-Nqakula’s home in connection with allegations that she solicited bribes from a contractor when she was defence minister. The Speaker claims she is innocent, but is now on special leave.

All in all, it’s been a good week for justice warriors.

In our lead story in this week’s DM168 newspaper, our Eastern Cape correspondent, Estelle Ellis, interviews the VC of the University of Fort Hare about his battle against death threats, assassination attempts and a crime syndicate that was fleecing the university.

Let me know your thoughts and tip-offs by writing to [email protected]

Yours in defence of truth,

Heather

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.