Billionaire Christo Wiese, former Steinhoff chairman and business partner of Steinhoff CEO Markus Jooste, said Jooste fooled everyone for years.
Jooste made headlines this week after the South African Reserve Bank (SARB) attached assets linked to him and his family.
The main assets which were attached are the Lanzerac wine estate, Jooste’s mansion in Hermanus, and the Silveroak Trust, with over R1 billion in assets.
Other assets include art worth R99 million, six luxury vehicles, jewellery, and other artworks worth R795,400.
The Reserve Bank also attached books, digital and printed documents, electronic devices, and passwords to help it in its investigation.
Investigative journalist Pauli van Wyk said the Reserve Bank blocked Jooste’s romantic partner Berdine Odendaal’s assets last year.
Her assets include property in the upmarket Val de Vie estate and four bank accounts with around R4.7 million in them.
Odendaal has been fighting with the Reserve Bank to get more access to her money.
Wiese, who served as Steinhoff chairman when news broke of major accounting irregularities at the company, welcomed the action by the Reserve Bank.
He said the development is significant because the Reserve Bank has significant powers which private entities don’t have.
“It is a very important development which I think Markus Jooste did not expect,” Wiese said.
Markus Jooste fooled everyone
Steinhoff was the darling of the JSE for nearly two decades, with an annualised return of 18.85% between 2000 and 2016.
Most analysts, auditors, and Steinhoff board members sang Markus Jooste’s praises and saw nothing wrong with the company.
However, the cracks started to show when German authorities raided Steinhoff’s offices in November 2015 related to a tax investigation prior to its listing on the Frankfurt Stock Exchange.
Two years later, news broke of major accounting irregularities in Steinhoff’s financial statements. PwC revealed there was an overstatement of group sales of $7 billion.
The share price plummeted – falling from a peak of R95 per share to R1.26 per share – which cost pensioners and shareholders billions.
It raises the question of how Wiese and the rest of the Steinhoff board missed blatant fraud at the company.
Wiese said Jooste fooled everyone, including very smart auditors and investigators.
“When the first allegations against Jooste were made in 2015, the Steinhoff board appointed the prominent German forensic investigation firm FGS,” he said.
The firm was mandated to investigate every allegation by the German prosecutors and report its findings to the board.
“They reported to the board and me in my position as chairman that they found no truth in the allegations against Jooste,” Wiese said.
He added that Jooste and other perpetrators of the fraud at Steinhoff managed to hide it for at least a decade.
It included hiding it from many parties, including:
- The internal auditors of the company.
- The statutory auditors of the company.
- The component auditors.
- The regulators.
- The rating agencies.
- The banks.
- The institutions which lend Steinhoff tens of billions of rands.
“This gives you some idea of how cleverly this fraud was constructed and how difficult it was to detect,” Wiese said.