Nicola Mawson
As the Financial Services Conduct Authority (FSCA) continues to chase billions from the estate of Steinhoff International fraud kingpin, the now deceased Markus Jooste, the legal system is making slow progress in prosecuting former Steinhoff director and legal head Stephanus Grobler.
Grobler, who is out on bail of R150 000 is set to make his second appearance in the Pretoria Specialised Commercial Crimes Court on October 4, Hawks spokesperson Thandi Mbambo said.
In March, Grobler was arrested and faced the court on charges of fraud, a pattern of racketeering activities and contravention of the Financial Markets Act against Steinhoff International Holdings. His bail conditions included reporting to the Brooklyn police station on Mondays and Fridays, handing over his two passports, and giving up his firearms.
His co-accused and alleged king pin of what has been labelled one of South Africa’s most heinous cases or corporate fraud, Markus Jooste killed himself the day after his arrest warrant was issued, fatally shooting himself on March 21.
However, that does not mean that there is no recourse that the legal system can take to recoup losses as a result of the fraud.
Earlier this month, Gerhard van Deventer, divisional executive of the FSCA’s enforcement division, told journalists that it was set to file a claim against his estate to enforce the R475 million penalty it had levied on him.
The fine, like the arrest warrant was issued the day before Jooste killed himself. The FSCA had concluded that Jooste contributed to the publication of misleading or deceptive financial statements about the company.
The FSCA’s penalty was over and above the reduced fine of R20m, plus interest, levied in December, 2022 for insider trading. The original fine of R162m, also for contraventions of the Financial Markets Act was set aside by the Financial Services Tribunal (FST) in December, 2021.
In addition, the South African Reserve Bank seized more than R500m from Berdine Odendaal, Jooste’s rumoured former romantic partner at the time of his death. Among the items seized was a property valued at R18m, as well as millions in bank accounts.
Steinhoff found itself in an accounting scandal in 2017, with audit firm Deloitte confirming accounting irregularities. The financial fraud included several misrepresentations of its financial status and harmed South African investors, who incurred serious losses.
In 2017, news broke of the country’s biggest corporate fraud amounting to €6.5 billion (then R134bn) which was explained as “an accounting error”. The fraud also cost the Public Investment Corporation close to R21bn in investments. Steinhoff was liquidated in October.
Steinhoff had a vast array of investments, both in South Africa and Europe, including Ackermans, Buco, Dunns, Flash, HiFi Corp, Incredible Connection, John Craig, Pennypinchers, Pep, Refinery, Russells, Shoe City, Tekkie Town and Timbercity.
Another former Steinhoff director, Dirk Schreiber, who was chief financial officer for Steinhoff Europe was implicated in the fraud, with the authority finding that he also published deceptive statements about the company’s financial standing that omitted material facts.
Schreiber escaped financial sanctions as he had cooperated with investigations into the company’s accounting irregularities.
The FSCA said due to the extent of Schreiber's cooperation with the investigation, the FSCA was not imposing an administrative penalty on him.
Last year German courts found that Schreiber and Siegmar Schmidt, who worked with Jooste were guilty of fraud.
Schreiber was sentenced to a three-and-a-half year jail sentence, with one year conditionally suspended. Schmidt received a suspended sentence of two years.
BUSINESS REPORT