BUSINESS REFLECTION
After the Bell: Markus Jooste was hoist with his own petard
Why do people commit financial crimes? The answer to that is well researched. People commit financial crimes because they have the motivation, the opportunity and the ability to rationalise what they do.
Former Steinhoff CEO Markus Jooste’s death by suicide was shocking and leaves one with conflicting emotions. We are fragile little leaves, we humans. Many people, I suspect, think suicide is a cowardly way of avoiding taking responsibility for all the harm you caused. There is certainly something to that. But there is also a kind of feeble bravery in it; it’s the last resort in an attempt to spare yourself (and perhaps those you love) the indignity of what is to come. It leaves everyone a bit confused and a lot traumatised.
It’s a horrible end, but — there is no escaping this — Jooste’s was perhaps somewhat deserved. Sometimes suicide is thought of in general terms but of course, it’s a complex issue. Suicide stemming from depression is very different from suicide as a result of being discovered to have been a crook and bringing shame on yourself, your family, your colleagues and your businesses. For this, Jooste is the prime culprit.
But I wonder how much those around him are culpable too; not only his associates and his co-conspirators, but all the other struts and beams in the construction of our society that are supposed to guard against financial fraud and such moral decrepitude. Jooste failed us, that much is obvious, but to what extent did we fail him? Or is that just all too convoluted and labyrinthine?
You could ask the question a different way: why do people commit financial crimes? The answer to that is well researched. People commit financial crimes because they have the motivation, the opportunity and the ability to rationalise what they do.
Financial crime has an incremental aspect. In Jooste’s case, some financial analysts were concerned about the probity of Steinhoff’s accounts from early on. The concerns flared up quickly but also died down quickly. It’s an open question why those concerns were never taken seriously, and it’s at this point that you might argue that there is an element of shared blame in the arc of Jooste’s demise. Having escaped this hiccup, Jooste might have thought he could take it a step further.
And I hate to say this, but if that’s true, financial journalism is also in the spotlight here.
Financial crimes take place if potential criminals believe that the rewards are achievable and large, the chances of detection are low and the punishment is light.
If they think the chances of detection are high and the punishment is severe, then the risk of them committing financial crime are lower.
An additional aspect is that you have to be able to rationalise the criminal activity to yourself at the very least, but presumably also to your friends and family. What that looks like, psychologically and personally, truly defeats me. Do you think, well, it’s just a temporary thing and once the business conditions have improved, it will pull itself right? Or do you think, I have to do this, or my whole organisation is at risk? Or do you just not feel a sense of wrong in the way that most people do? Or do you so badly need the respect brought by wealth and success that it outweighs the guilt for initiating those “smallanyana skeletons”?
In Jooste’s case, there were red flags: his obsession with horse racing and the way he presented his wealth. Please don’t get me wrong: I love horse racing. But it can entail some flaunty hobnobbing at the high end of society and like gambling elsewhere, a sense that winning is an exercise in beating the odds and accepting the risk of chance. The same applies to owning more cars than you can drive.
There is an institutional problem in South Africa concerning the weak system of internal controls and poor financial security measures. Obvs. When Schabir Shaik is found guilty of corruption and sentenced to 15 years’ imprisonment and yet is on the golf course a couple of years later, it suggests a society that is not serious about commercial crime.
South Africa is beginning to try to rectify the problem, exemplified by the fact that the Hawks were about to pounce in the Jooste case and that the Financial Sector Conduct Authority just had. (So had a German court, by the way). But it’s equally obvious that this has taken eight years for the pouncing process to get under way.
In the final analysis, Markus Jooste exploited obvious weaknesses in SA’s financial and legal systems but was hoist with his own petard. The demise of Steinhoff followed from the analysis of a foreign short seller and then that of a European accounting firm which came about as part of his vaunted ambition and overconfidence. He was ultimately brought down by the gradually tightening noose in his home country. There are concerns and consolations in that duality. DM
Become an Insider
Hoisted
Hoist with his own petard” is a phrase from a speech in William Shakespeare’s play Hamlet that has become proverbial. The phrase’s meaning is that a bomb-maker is blown off the ground by his own bomb, and indicates an ironic reversal or poetic justice.
That is the quote. No matter that you think “hoisted” is more grammatically correct
also…and perhaps more apt?
Pétard comes from the Middle French péter, to fart, from the root pet, expulsion of intestinal gas, derived from the Latin peditus, past participle of pedere, to break wind.
“hoist” is the past tense of “hoise”.
Yes Googlers
Food for thought, interesting take. Correctly stated that the suicide associated with mental illness is in a different category. It reminds one of the fate of the Romans who, when caught in a failed coup, would be given the opportunity to end their own lives to spare bad outcomes for their surviving family members. They would even throw a small party before they ended their own lives. Pity the deceased couldn’t have shared some of his wealth with the poorer communities in Hermanus before his departure.
The Japanese have the same mindset when it comes to disgrace- pity its not picked up by certain politicians in this country! To them, theft and corruption without consequences is a given!
The mind boggles at the thought of 200 ANC politicians committing seppuku simultaneously. But no there is no chance of that if only because seppuku is believed to be an honourable and we all know that no ANC leaders are honourable.
Just imagine the money they would make for the fiscus if they sold tickets to a event where anc politicians have to commit seppuku, it will make millions!
Felt good there for a second, we can only dream.
….and then think about the 400 odd Sports Cars that will need to be auctioned off by the AFU !
I rest my case!
Only 400 .. that is only for him and her combinations ! What about all the siblings and hangers on, in on the deal ?
….Also then there will be no-one left amongst the cadres to tender for the lucrative State or Provincial Funerals!
I rest my case!
Love the idea but concerned about the risk of permanent stains.
We seem to have a reverence for newsmakers and hence a reluctance to tackle scams. I reported a scam, which turned out to be a serious one, to the authorities who informed me that they were watching it. Craig Warriner got away with things for 15 years while the sniffers were ridiculed. If he hadn’t given himself up he’d probably still be out there scamming.
There are some dodgy schemes out there hiding under very respectable covers. When I explained one of these to a journalist he told me that these were respectable people and I shouldn’t try to impugn them. But he wouldn’t do anything about it unless I could give him chapter and verse. So another potential disappointment for pensioners looms. A few quick questions and, as Tim says, the perpetrators might be convinced that they couldnt get away with it.
Lots have been written about Marcus Jooste in recent days but I have not noticed anyone saying anything nice about him. Maybe his family should break their stoic silence and tell the world what there was to love about him. To leave this world without any kind words being said, is really sad.
Sadly, perhaps he flaunted his mistress to the extent that his family don’t have much nice to say about him?
Jooste operated as if he were the ANC President, perhaps didn’t share all his ill-gotten wealth sufficiently unlike top ANC cadres in and around Government
This country isn’t serious about financial ethics.
I think of one lawyer I dealt with. He was working for another practice but his efficiency and the clarity with which he explained everything was impressive. The first time I dealt with him was by chance. Then I gave him more business. Then he struck out on his own and suddenly things were different. Everything took a long time. There was vagueness about money. A person I was selling property to told me they’d paid in full, the lawyer is telling me that he was being kept waiting. Then a municipal bill arrives with a demand for a large amount of money that came out of the blue. The lawyer says he’ll make it go away. He calls me from, he says, the municipal offices, instructing me to go to a certain office number in the morning where I will meet a man who will not tell me his name and to whom I should give an envelope containing 5 grand.
Frustrated and annoyed I did some googling. Then I found about how he’d done several old ladies out of their savings. I found about the games he’d been playing with trust accounts. How he’d dug a financial hole that kept on growing.
And the reason I got all of this was because it was right there in the Law Board’s hearing notes which were on line.
Yet he was allowed to keep on practicing, under supervision for a certain number of years. He’d made errors, he was sorry. The old ladies were still out of pocket. How many more cases are there where somebody abused trust and got away with it?
You mean like the Advocate who works for ‘peanuts’. ?
I see the author got stuck into the Thesaurus
i don’t follow what you mean… there seems nothing overly sesquipedalian, logophilic, pretentious, ostentatious or grandeloquent about the article.
unless you’re referring to the well-known phrase in the title (from shakespeare). many shakespearean phrases/quotes are commonly used (eg, “some are born great, some achieve greatness, and others have greatness thrust upon them.”, “what’s done cannot be undone.”, “nothing comes from nothing.”, “neither a borrower nor lender be.”, “many a true word [is] been spoken in jest.”,). “hoist on one’s own petard” is another common one. it means poetic justice and is not so unusual as to be considered thesaurusy.
This is no doubt the comment of the day 🤣.
We should be explicit about the failure of governance. The respected insider fooled his pals who look and think and speak like him, and never heeded early warning signs. There was enough expertise on the Board and the auditing firms to see what was going on. They just didn’t look because “he is one of us.
My big question is how he managed to fool the auditors for such a long time? The auditors are highly paid people who are supposed to find these malpractices at the first instance. There is something wrong in that industry.
If shareholders want an audit that is 200% secure against management fraud : they better get used to no dividends, ever again.
‘Hoist by his own petard’ first appeared in Shakespeare’s Hamlet and has since become proverbial. Sorry Stuart.
You don’t seriously mean there was no ‘literature’ before William ? Or none worthy of mention ? Monopolistic ?
Eh, how did you make that leap?
Is this oke genuinely dead? Or he is sitting in some remote country after paying off a couple of officials to declare him dead? (Once a scammer always a scammer) My useless thought for day.
It is possible that his ‘death’ was by AI !
Lol!!who knows😉
Tim he exploited loopholes with the connivance of the board members, many financial institutions, auditors, legal and financial advisers who are now crying spilt milk after the event but did precious little to attempt to avoid it. They are still getting away with it at the expense of the little person who has lost his/her pension income following bad advice from so called independent experts
He was enabled by his board, shareholders, auditors etc – they all need to be held to account.
Just shows, graft knows no colour except a greenback.
It is regrettable to see such brilliant minds depart the earth under these circumstances. Unfortunately, white-collar crime is not dealt with as seriously in South Africa, which allows individuals like Markus Jooste to continue engaging in such acts.