WRAP: Jooste washes hands of Steinhoff collapse | Fin24

WRAP: Jooste washes hands of Steinhoff collapse

2018-09-05 09:20

At no point in former Steinhoff CEO Markus Jooste's testimony before Parliament, did he take responsibility for the fallout at the retailer.


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Last Updated at 15:05
05 Sep 21:15

Analysing former Steinhoff CEO Markus Jooste's first public utterances since his former company's near-collapse nine months ago to the day.


‘It wasn’t me’ – decoding former Steinhoff CEO Markus Jooste

ANALYSIS: Steinhoff's Markus Jooste's three-tiered defence

05 Sep 21:11

Analysing former Steinhoff CEO Markus Jooste's first public utterances since his former company's near-collapse nine months ago to the day.


‘It wasn’t me’ – decoding former Steinhoff CEO Markus Jooste

ANALYSIS: Steinhoff's Markus Jooste's three-tiered defence

05 Sep 13:20
WATCH: Jooste leaves Parliament

05 Sep 13:20

Parliament sits with three versions of events of what happened at Steinhoff

In his concluding remarks Scopa Chair Themba Godi said that Parliament has heard three versions of events.

One from former Steinhoff Chair Christo Wiese who called the collapse, "a bolt from the blue", former CFO Ben La Grange's version which attributes the fall to "three baskets of issues" and partly that Jooste did not "fully share information" with him. And finally Jooste's version that the collapse in the share price is attributed to uncertainty because the release of financial statements were delayed.

"As Parliament we cannot say we have heard you, let it pass," Godi said.

However, he said Jooste's testimony provided details on the dates, sequence of events and the people involved.

He told Fin24 on the sidelines that whether the details given by Jooste are correct, is to be determined. "But it does give us something to work on... which we did not have before." 

"We have three positions of what happened, and we are none the wiser," he said.

The committees will meet to determine a way forward as there is still a lack of understanding of what happened as the testimonies differ so much that it appears that all three witnesses worked at three different companies.

05 Sep 12:55
WATCH: Jooste answers questions on Steinhoff's collapse

05 Sep 12:52

05 Sep 12:51

05 Sep 12:25

Jooste blames businessman Seifert for Steinhoff accounting probe

Jooste detailed the strategic partnership with Dr Andreas Seifert, which started when the MoU was signed in 2007.

Seifert owned a large mass discount retail chain which operated in Germany and Austria and in also smaller Eastern European companies. At the time Steinhoff had an investment in Poco, in Germany. The two businesses merged through the 50:50 joint venture, he explained.

In 2011, they bought Conforama but Seifert did not have his 50% for the acquisition, which Jooste viewed as a cashflow problem and not an "integrity issue".

Then Seifert pushed for the Kika/Leiner acquisition, Kika/Leiner was Seifert's biggest competitor in Austria. This transaction raised red flags, when again it appeared Seifert would not be able to bring his share, Jooste explained.

This led to a fallout in November 2014. The relationship with Seifert was terminated in January 2015, on legal advice.

After that the litigation against Steinhoff commenced, as did the allegations of accounting irregularities, Jooste pointed out.

One case is still open in Vienna, over a dispute about a shortfall related to the  Conforama acquisition, Jooste said.  Jooste told MPs that in a hearing at a court in Vienna it appeared, in retrospect that Seifert had no intentions on paying for any acquisition that was proposed. "That was part of the fight and the litigation that was going on at the time," he said. 

Jooste added that the "interim remarks" by the judge in Vienna confirmed the "feeling" Steinhoff had about the matter.

05 Sep 12:08
WATCH: Jooste's testimony before Parliament

05 Sep 12:06

Steinhoff biggest corporate failure of SA - Jooste

Jooste said that Steinhoff is the biggest corporate failure in SA, and not the biggest corporate scandal, as suggested by Scof chair Yunus Carrim.

Carrim said that Jooste painted himself as the "Mother Theresa" of Steinhoff.

“The word scandal is for writers of sensation," said Jooste.

He added that it is saddening that people lost money, but Steinhoff managed to mitigate job losses.

He explained that the fall in the share price was due to the delay in the release of the financial statements, which created uncertainty to which markets reacted. 

He also explained that Steinhoff's failure is not due to its multi-lateral structure, but rather his decision to enter into a Joint Venture with Andreas Seifert in 2007.

05 Sep 11:58

Steinhoff had a buying group - Jooste

Former Steinhoff CEO Markus Jooste confirmed that Steinhoff had several buying groups around the world. Supporting former CFO Ben La Grange's testimony last week.

Jooste said that the buying groups were audited and were also part of an investigation by a German legal firms. 

05 Sep 11:54

Steinhoff's audit processes were professional

"I am satisfied in my personal opinion that the audit processes were professional," Jooste told MPs. The former Steinhoff CEO steered clear of criticising the audt processes of the retailer.

He would not be drawn in to blame anyone for Steinhoff's downfall. 

"I did not come here to blame anybody I personally believe all the colleagues I worked with worked in the best interests of the company. They gave their lives, it was part of the daily DNA of the business."

Jooste said that everyone was dedicated to grow the business, make it successful and create employment and to "enjoy it".

"I do not blame anyone for what happened at Steinhoff."

Jooste would not comment on events which took place after December 4, as he was on his way out from the company. He said that he could not comment on the PwC investigation either until the report is released at the end of the year.  This investigation will also inform the recourse that investors will take, he explained.

He added that investors are well within their rights to take on civil claims. 

05 Sep 11:46

Steinhoff cut off communication with Jooste

Jooste said that Steinhoff cut off all communication with him since his resignation, emphasising his earlier statement that he has not been in contact with the firm since December.

"Steinhoff ceased at that stage all communication with me... I was informed and understood no one at Steinhoff had to have further communication or discussion with me."

Jooste confirmed that he was interviewed by the Financial Services Board and that he and his legal team have been available to assist the Hawks in their investigation.

He added that he had no more documents to submit, the day he left Steinhoff he lost his telephone contacts, emails and other records. 

05 Sep 11:34

05 Sep 11:27

Jooste family trust held R3bn in Steinhoff shares on day of fallout

On the day of the Steinhoff share price fallout, Jooste's family trust which has an investment company Mayfair, lost R3bn. The company held 68 million Steinhoff shares.

Jooste said it is public knowledge that Mayfair made a settlement with banks to avoid a default. The Steinhoff shares were to be used as collateral for the loans.

The shares were sold. "The investment company has no more Steinhoff shares left," he told MPs.

05 Sep 11:19

FIRST PICS: Steinhoff's Markus Jooste briefs Parliament

Markus Jooste and his lawyer Francois van Zyl SC, wait for proceedings to start on September 5 in Parliament. (Supplied)

05 Sep 11:10

Jooste has not been in contact with Steinhoff since resignation

Jooste said he has not been in contact with Steinhoff's management since he resigned in December. 

He said he could not comment on the new investigation by PwC- and only the investigations he was involved in, before he left in December 2017. 

As for the losses to the pension funds he said he could speak of it, but that is not the reason he came to Parliament. "It saddens me what happened at Steinhoff," he said referring to the losses incurred. 

Jooste recalled that he built Steinhoff for 29 years and grew employment from 100 to 130 000, and he had hopes that it would've grown further.

"I have never sold any Steinhoff shares in my career with the company," he told MPs.

05 Sep 11:03
Steinhoff shares are currently trading up 3.82% at R2.72, a far cry from it's 52-week high of R66.25.

05 Sep 11:02

Jooste opens up about his 'big mistake'

Jooste said the SMS he sent to close colleagues about the "big mistakes" he made refers to the joint venture Steinhoff entered into with a European retailer in 2007.

The joint venture led to "drama and fights" lasting three years since its termination in 2015.

"It led to the perception of accounting irregularities ... we were not able to complete financial statements on time.

Jooste went on to say that he is not aware of any Steinhoff staff members who "deliberately or knowingly" contradict the code of conduct.

He however said there were instances of fraud and theft but among lower level employees."I never lied about the activities of the company," he emphasised. 

05 Sep 10:56

Maynier drops F-bomb

DA MP David Maynier, citing a quote from an associate of Jooste who labeled the former CEO as an [Expletive] psychopath.

Scof chair Yunus Carrim reins maynier him and asks him to "cut the melodrama" and "ask the question".

05 Sep 10:47

05 Sep 10:44

Jooste says a new probe in allegations would have 'devastating effect' on Steinhoff  

Former Steinhoff CEO Markus Jooste said that Deloitte's proposal for further investigations into accounting irregularities would have a devastating effect on investor confidence, credit lines and the Steinhoff share price.  

Jooste was against the investigation as the firm had already commissioned investigations, which took two years and found that they had not found evidence to conclude that the accounting of referenced transactions was not in compliance with the IFRS Standards. 

"I was not aware of any accounting irregularity in the books of Steinhoff," Jooste said- referring to Deloitte's report. Accounting irregularities suggests fraud, he said.

A new investigation proposed by Deloitte would delay the release of financial results on December 6. As a result to Jooste proposed an alternative auditor be recruited and unaudited financial results be released instead.   

But the board did not side with this decision and the fallout of the Steinhoff share price resulted, he explained.

Jooste said the delayed release of financial results, remaining queries about accounting irregularities and a suggestion of a new probe despite previous two-year long independent investigations having taken place impacted confidence and led to the drop in share price.

05 Sep 10:36

Steinhoff's downfall began with 2007 joint-venture

Former Steinhoff CEO Markus Jooste says a partnership dating back to 2007 with an Austrian businessman Andreas Seifert, who owned a European retailer.

In retrospect this partnership was not the best decision for the business. The termination of the venture in 2015 resulted in litigation where allegations of tax planning misconduct were made against Steinhoff with regard to it's European subsidiary.

But investigations by German prosecutors and two firms commissioned by Steinhoff did not find evidence to support the allegations by Seifert, when they  concluded investigations two years later. 

05 Sep 10:23

Jooste unpacks Steinhoff's multi-layered reporting

In his testimony to Parliament former Steinhoff CEO Markus Jooste unpacked the complexity of the firm's reporting. His testimony echoes that of former CFO Ben La Grange - multiple auditors were responsible for the reports of the multinational business units.

05 Sep 10:17
Follow the live stream

05 Sep 10:06

Steinhoff hearing commences

Scof chair Yunus Carrim says the legal framework has been covered- last week Parliament legal advisor Frank Jenkins explained that witnesses are protected from self-incrimination.

In terms of section 16 of the Powers and Privileges Act: Jooste must answer factually in connection with matters relating to the inquiry. But the evidence given under the oath may not be used against him in any court outside Parliament. 

Scopa chair Themba Godi asks Jooste to take his time and relax- because what he is about to say is of national significance. He is talking to Parliament, the nation as the fallout at Steinhoff affected pension fund holders. The intent of Parliament is to get clarity. 

Carrim reiterates that Parliament is not a court of law but that Parliament is looking to learn from this experience because of it's national interest, tighten regulations and laws so that it does not happen "as often as it happens".

"We want to see what the gaps are in legislation and what we can do to empower regulators. We are not here to secure guilt."

05 Sep 10:03

05 Sep 09:53

TIMELINE: Markus Jooste and Steinhoff's R200bn fall in market cap

Follow the events following Jooste's resignation and ultimately his appearance before Parliament.

05 Sep 09:39

05 Sep 09:35

05 Sep 09:33

05 Sep 09:25

Christo Wiese: All I want to know from Steinhoff's Markus Jooste is, ‘Why’?

Almost nine months to the day since Steinhoff began its precipitous fall on December 6 last year, its 57-year-old former CEO Markus Jooste will come out of seclusion to face a grilling at Parliament on Wednesday.  

The man who was once South Africa’s richest, but whosefortune was severely dented by the Steinhoff saga, confirmed he would be watching Jooste on television on Wednesday. 

Asked what he would ask the man who was once like a son to him - but whom he has not seen nor heard from since December 6 - former Steinhoff chairman Christo Wiese says MPs will know exactly what to ask, but his own question would be a simple, "Why?"  

05 Sep 09:24

05 Sep 09:23

Markus Jooste's lawyers have arrived at Parliament

Markus Jooste's legal team is at Parliament: They are Francois van Zyl SC, Jeremy Muller SC and Salome van Zyl.

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