Committees meet with former Steinhoff CEO

Wednesday, September 5, 2018

The Standing Committees on Finance, Public Accounts, Trade and Industry and Public Service and Administration have met with the former CEO of Steinhoff, Markus Jooste.

Today’s meeting was the fourth meeting held this year by the committees on the Steinhoff matter.

“Jooste’s overall statement and responses to questions made out that he was not aware of any financial irregularities, has done no wrong and cannot be held personally responsible for the collapse of Steinhoff shares,” the Parliament Committees said in a joint statement.

“I want to place it on record that when I left Steinhoff on the 4th of December, I was not aware of any accounting irregularities, what they refer to in the books of Steinhoff,” Jooste said.

Headquartered in Stellenbosch in the Western Cape, Steinhoff International, which employed 130 000 people worldwide, is a South African global furniture giant that is dual listed in Germany.

Its share price came tumbling down when Jooste resigned in December last year after allegations of “accounting irregularities” surfaced ahead of the company’s results being announced.

Speaking publicly for the first time since the company’s demise, his rare appearance before the joint meeting of oversight committees comes after he declined to appear before an inquiry into Steinhoff matters earlier this year, with his reason being that he had already left the company.

In a bid to get him to appear before the joint meeting, Parliament served a summons on the former CEO of a firm that has seen its share price reportedly plunge by 95% ever since his departure.

In his statement, Jooste said he personally lost R3 billion when the Steinhoff share price collapsed in December.  

Giving a detailed sequence of events, Jooste said what led to the collapse of the Steinhoff share price started with his decision to form a partnership with Austrian businessman Dr Andreas Seifert in 2007, who led a huge retailer in Europe with a considerable footprint.

His vision with Seifert at the time, Jooste said, was to form a large retail chain that would be a competitive venture across the entire European Union.

At the time, Steinhoff was a manufacturer and sourced its furniture, and that the furniture giant needed a retail partner.

“Unfortunately, it turned out that Dr Seifert was the wrong person to go into business with for various reasons and Steinhoff’s association with Seifert was terminated in March 2015 and that resulted in various litigations with Steinhoff and him, and that was on-going by December when I left Steinhoff,” Jooste said.

The Chairperson of the Standing Committee on Finance, Yunus Carrim, said the committees felt that Jooste could have been far more forthcoming and answered questions more precisely without incriminating himself or undermining his right to a fair trial in a court of law or a fair inquiry by a regulatory body. He said that, in a way, by not being open, Jooste suggested he has much to hide.

“His account to Parliament reinforces our call that the regulatory bodies and other state agencies should act swiftly and more decisively to deal with those who did wrong at Steinhoff,” said Carrim.

Carrim said they recognised the complex and global nature of corporate scandals such as Steinhoff’s and the huge amount of forensic and other investigative work necessary to establish exactly what happened and who is responsible for precisely what failure, but surely there should be more progress, 10 months after the collapse of the Steinhoff shares.

“More can and needs to be done,” said Carrim.

He said they also believe there needs to be far more concerted cooperation between the relevant state agencies in our country and Germany, the Netherlands and elsewhere.

Jooste said in January 2015, German tax authorities carried out a search and seizure operation at the premises of a Steinhoff subsidiary in Germany. It emerged that former executive of the company, who had been fired over misconduct, had made allegations against the Steinhoff subsidiary to tax authorities, Jooste said.

He also said that in the same year, Seifert also made various statements to the German tax authorities to add to the investigation.

The Committees’ particular concern remains the poor performance of the Hawks and the National Prosecuting Authority, and strongly believe that they need more forensic, auditing and other technical skills to effectively fulfil their responsibilities in regard to Steinhoff.

“While there is considerable focus on public sector corruption at present, the private sector usually goes scot-free. We need to decisively deal with private sector corruption. After all, in most cases of public sector corruption there is a private sector hand at work,” said Carrim. –