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FERIAL HAFFAJEE: Why is Markus Jooste in Parliament and not on trial?

Sep 06 2018 07:17
Ferial Haffajee

Former Steinhoff CEO Markus Jooste has allegedly provided false and misleading information with the intent to commit fraud against Steinhoff’s creditors, employees and shareholders, and was party to submitting untrue written statements to the company's accounts. 

How do we know this? Because the audit committee chair of Steinhoff’s board, Steve Booysen, told the Hawks this in January when charges were laid, according to a recent answer to a parliamentary question by the Minister of Police Bheki Cele.

This tawdry year, in which Steinhoff has crashed and burnt billions of rands in pension investments of ordinary people, has brought further clarity. As the global retailer's board belatedly excavates what happened at the company, a picture of inflated profits, false statements or - in simple terms - fraud on a grand scale, is emerging.    

Yet, despite this growing body of proof, Jooste was able to bluster his way through a three-hour appearance at Parliament on Wednesday, instead of being subject to cross-examination in a criminal trial before a judge. There is no doubt Jooste is taking strain. His hair is greyer, and while his confident air is still remnant, his swagger is less certain than it was when adoring hordes of fund managers were pouring billions into Steinhoff to sustain his dream of taking on Swedish furniture retailer Ikea. 

But for a few discerning analysts like Sean Holmes, then at JP Morgan and a small boutique firm in Cape Town, most pension funds bought the Steinhoff story and have now lost billions of rands from the portfolios of ordinary, hardworking South Africans. 

They, or we (as I’m one of them) are unlikely to get compensation. 

In his appearance before Parliament on Wednesday, Jooste made a curt apology that was no less than cursory for these losses. "I feel totally responsible for what happened at Steinhoff. I chose the wrong partner. We went into territories we should not have gone into. I said I would take it like a man. I have lost my whole career," Jooste told MPs.

But when you listened carefully, the former balling CEO pinned the blame on Deloitte, the firm's auditors, which last year refused to sign off the company’s accounts, a decision which precipitated Steinhoff's share price crash.

He also repeatedly blamed his former business partner, Austrian furniture retailer Andreas Seifert, who helped realise Steinhoff’s global expansion plans. When that relationship soured, Seifert took a file of documents about alleged tax evasion to the German authorities, which began an investigation in 2015. 

While it took the Steinhoff board and Deloitte another two years to act, Seifert’s actions first blew the lid on what was clearly huge corporate fraud. 

Benefiting from Zuma 

Years of state capture have ground down South African authorities' ability to investigate and prosecute fraud. It’s clear that the Hawks have not done significant work on the charges already laid by the Steinhoff board in January. And it's painfully clear that even if the Hawks had turned the report into a docket, the National Prosecuting Authority could not have moved quickly as it has also been decimated in the past decade.   

The NPA has not, for example, been able to successfully prosecute a single case involving state capture or related corruption. Even a relatively simple case like the mismanagement of development funds for the Gupta’s Estina dairy project in the Free State has been a struggle for state prosecutors.

Jooste’s appearance at Parliament on Wednesday may provide a modicum of public justice and opprobrium. But in the main, he, like the Guptas, is benefiting from the destruction of South Africa’s criminal justice system by former President Jacob Zuma, who systematically broke down the institutions of ultimate justice. 

* Ferial Haffajee will write a weekly column on Fin24, which will appear on Thursdays. 

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