Nicola Mawson
Former Steinhoff shareholder, Gerhardus Burger, yesterday pled guilty to three charges of insider trading in contravention of the Financial Markets Act and was sentenced to five years imprisonment by the Pretoria Specialised Commercial Crimes Court.
Burger, who is 79, received a five-year sentence that was wholly suspended for five years on condition that he does not trade shares based on inside information during that period. He also has to pay back proceeds from selling his shares.
He was an associate of the late former Steinhoff CEO, Markus Jooste, who apparently sent him, Jaap du Toit, Marthinus Swiegelaar and the late Ockert Oosthuizen text messages warning them to sell their Steinhoff shares. Burger sold more than 39 000 in Steinhoff shares, while Du Toit was allegedly the only one that did not trade his shares in Steinhoff.
In a statement, the Hawks said that these tip-offs were sent before the share price dropped following the 2017 news of the fraud of €6.5 billion (R134 billion) which was initially explained as an accounting error. The theft also cost the Public Investment Corporation close to R21bn in investments.
The matter came to light after Deloitte refused to sign off on the company’s 2017 results, with findings subsequently made public including that financial information had been falsified.
Jooste, alleged kingpin of the fraud, killed himself during trials in Germany and a day after the Financial Sector Conduct Authority fined him R475 million, the largest yet fine by the authority on an individual, for accounting irregularities at the company.
The Hawks are currently investigating events around Steinhoff’s liquidation, which is the biggest corporate scandal in South Africa to date.
In addition to arresting Burger yesterday, former CFO Andries Benjamin le Grange was arrested and released on R150 000 bail after appearing at the Pretoria Specialised Commercial Crimes Court on charges of fraud on June 26 this year.
Le Grange was in court alongside his co-accused, Stephanus Grobler, a previous executive of the now defunct company, who was in court seeking a trial postponement as well as review of his bail conditions. Grobler initially appeared in court on March 25 after being arrested three days earlier.
Grobler was also arrested on charges of fraud, a pattern of racketeering activities and contravention of Financial Markets Act and released on bail. Both Grobler and Le Grange will be back in court on October 4.
Jooste, at the time of his death, was under investigation by the National Prosecuting Authority in a criminal case and was set to face penalties of up to R15m or 10 years’ imprisonment, or both.
In addition, the Financial Services Conduct Authority is filing a claim against Jooste’s estate to enforce the R475 million penalty it had levied on him. 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 in December 2021.
The South African Reserve Bank has 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.
Another former Steinhoff director, Dirk Schreiber, who was chief financial officer for Steinhoff Europe, was implicated in the fraud, but was not fined as he co-operated with the FSCA’s investigation.
Last year, German courts found that Schreiber and Siegmar Schmidt, who worked with Jooste, were guilty of fraud.
Steinhoff had a vast array of investments, both in South Africa and in Europe.
BUSINESS REPORT