Jooste digs in to fight R15 million JSE fine

Former Steinhoff boss Markus Jooste is continuing to fight efforts by the Johannesburg Stock Exchange (JSE) to fine him for his role in SA's largest accounting scandal.

Jooste has still not paid the R15 million fine the JSE imposed on him in January for releasing false and misleading financial statements and creating a sham R376 million invoice.

The former Steinhoff CEO, who lost his initial appeal against the fine last month, now wants to take the matter on review to a new court.

As Jooste digs in for a long legal battle against the JSE, the clock is running down on two criminal charges he faces in Germany.

Jooste has refused to travel to Germany to answer charges that he oversaw a complex web of fraud at Steinhoff that falsely inflated the retailer's assets and hid billions of rands in losses.

The two charges he is facing are expected to lapse at the end of 2023 and 2024 in line with Germany's statute of limitations.

After the local bourse fined Jooste R15 million and barred him from acting as a company director for 20 years, Jooste took the ruling on appeal to the Financial Services Tribunal.

Last month, the tribunal dismissed Jooste's reconsideration bid.

The tribunal chair, retired Judge Louis Harms, agreed with the JSE that Steinhoff's financial information published under Jooste's watch was "false in material respects".

As CEO, Jooste bore ultimate responsibility for making sure the financial statements were correct.

Finances

Harms dismissed Jooste's protestations that he didn't know what was happening. He said an email trail showed that the CEO was "intimately involved in how the finances worked within the group and how the book entries shifted funds from the one to the other."

He also criticised the former Steinhoff boss for not attempting to explain why Steinhoff collapsed in late 2017, saying:

It was not because of Covid or some eruption of Mount Krakatoa. The applicant did not even attempt to offer an explanation.

With the appeal falling flat, the JSE said it expected Jooste to pay the R15 million fine "immediately".

But the demand for payment has been put on ice for now after Jooste said he intended a new bid to challenge the tribunal’s findings.

The Financial Sector Regulation Act allows tribunal rulings to be taken on review. A section of the act states that anyone who is "dissatisfied with an order of the tribunal" may institute proceedings via the civil court system.

The JSE told News24 it would "respect and adhere to the legal process" as it awaits Jooste's next move. Jooste's legal team, meanwhile, continued its policy of not commenting. The R15 million fine is far from the only legal headache that Jooste is facing.

Germany

There is an open arrest warrant against him in Germany, where he is wanted on two counts of accounting fraud that could put him behind bars for up to three years.

A German court issued the warrant of arrest in June after Jooste failed to appear in court for the start of a fraud trial.

Jooste's German legal lost its bid to appeal the warrant in July. German authorities then started to consider the feasibility of launching an extradition bid.

While Jooste's trial stalled after he failed to appear in court in person, two of his co-accused implicated him in fraud at Steinhoff.

The retailer's former European finance boss, Dirk Schreiber, was sentenced to an effective two-and-a-half years in jail in August. Another top executive who worked with Jooste, Siegmar Schmidt, received a wholly suspended sentence of two years.

Jooste, who is facing similar charges to Schreiber and Schmidt, needs to be physically present in Germany for his trial to begin. Authorities there have rejected his attempt at an explanation for not presenting himself at court. –Fin24