Markus Jooste (Brenton Geach/Gallo Images/Getty Images)
The Financial Sector Conduct Authority (FSCA) has hit disgraced former Steinhoff CEO Markus Jooste with a fine of R475 million – but it expects a long legal fight.
Jooste has until 19 April to pay the amount, but can also launch an appeal at the Financial Sector Tribunal.
“We are expecting him not to immediately pay the penalty,” said Alex Pascoe, head of FSCA’s market abuse investigation team. He expects that Jooste is probably going to appeal and that the case may eventually end up in the Constitutional Court.
Pascoe said “a long road of litigation and Stalingrad strategy [delaying tactics in court proceedings]” lies ahead.
A criminal case with the National Prosecuting Authority has also been opened.
The R20 million fine for insider trading, previously imposed on Jooste by the FSCA, is yet to be paid. Jooste is challenging the fine in the high court. He needs to approach the high court with the review application by 26 March, said Pascoe.
Following a lengthy investigation, the FSCA said on Wednesday it found that Jooste and Steinhoff’s former European finance chief, Dirk Schreiber, were responsible for publishing deceptive statements about Steinhoff International’s financial position between 2014 until 2017.
This meant investors based their decision on false information, which resulted in hundreds of billions of rand in losses, also by pension funds.
“This type of behaviour is wholly unacceptable,” said Unathi Kamlana, commissioner of the FSCA.
“It was self-serving and dishonest and negatively affected the reputation and transparency of our regulated market.”
Given his level of cooperation and general assistance, leniency was given to Schreiber, who won’t be fined, said the FSCA.
A German court sentenced Schreiber to three and a half years in prison. A regional court in Oldenburg issued a warrant of arrest against Jooste, after he failed to appear for the fraud trial.
Jooste’s assets have been frozen by the SA Reserve Bank.
The FSCA’s R475 million fine includes an amount of R10 million to reimburse it for “reasonable costs” as part of the investigation.
Jooste resigned from Steinhoff at the end of 2017, triggering a near-collapse that wiped out R200 billion in pension fund money and other investments as investors realised its financial statements were manipulated.