The JSE has censured former Steinhoff CEO Markus Jooste for cooking the books to deliberately mislead the market. 

Jooste has been hit with two R7.5-million fines and barred from holding office in publicly traded companies for 20 years.

He is appealing the fines. 

In a Stock Exchange News Services release on Tuesday, the JSE announced the Financial Services Tribunal had dismissed Jooste’s suspension application, but the fine appeals are to go ahead. 

In mid-November 2016, Jooste had created a fictitious handwritten document claiming pro rata contributions worth €23.5-million (R430.5-million), which Steinhoff at Work (a subsidiary of the holding company), would be entitled to receive from the TG Group.

Jooste gave the document to then-chief financial officer Ben La Grange to generate a false invoice to the TG Group for processing. The false invoice inflated Steinhoff at Work’s income for the 15 months ended September 2016 by R376,649,872, which in turn inflated the income of the group’s income. 

Without this fictitious income, Steinhoff at Work’s stated operating profit of R47,545,585 should instead have been a loss of R329,104,287.

In August last year, La Grange was disqualified from acting as a company director for 10 years and fined R2-million.

The JSE noted that, “Directors of issuers fulfil a critical role in ensuring that listed companies comply with the Listings Requirements. Issuers of securities listed on the JSE are only able to comply with the Listings Requirements if their directors take the appropriate actions to ensure that such issuers comply in all aspects with its provisions and to ensure that the financial information of listed companies are, in all aspects, valid and correct and that it represents a fair and accurate exposition of the company’s financial information.”

As such, the JSE imposed a public censure and the maximum permissible fine of R7.5-million for Steinhoff’s consolidated financial statements for the 2015 and prior financial periods, and for the 15 months ended 30 September 2016, which did not comply with International Financial Reporting Standards and the Listings Requirements.

It also imposed a R7.5-million for Jooste’s breaches of the Listings Requirements in respect of the Steinhoff at Work transaction, and disqualified him from holding the office of a director or officer of a listed company for a period of 20 years.

On 14 December 2022, Jooste applied to the Tribunal to suspend the JSE decision. The Tribunal has now dismissed the suspension application but the appeal of the enforcement of the fine is still pending. 

Jooste, the face of South Africa’s biggest corporate scandal, is facing trial in Germany in 2023 on charges of accounting fraud.

He’s accused of being the architect of the Steinhoff accounting fraud scandal, after a PwC forensic report found that top executives had overstated profits for several years, between 2009 and 2017, by more than R100-billion. BM/DM