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Thursday, 17 January, 2019

Markus Jooste blames Deloitte and Steinhoff board in parliament

Markus Jooste: owner appeared before South African parliament
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Ballydoyle patron Markus Jooste, leading owner in South Africa for ten years on the trot, made a bold bid to restore his battered reputation with a supremely convincing performance in the South African parliament today.

He put the blame for the collapse in Steinhoff shares at the feet of the company’s supervisory board and said it happened purely because they refused to take his advice on replacing auditors Deloitte.

Jooste, sporting a few more grey hairs than on his last racecourse appearance, was subpoenaed to appear before members of various parliamentary committees. Rather than wait for the interrogation to begin, he immediately related how the authorities in Germany investigated the Steinhoff subsidiary in that country after being fed misleading information by a disgruntled associate.

Steinhoff carried out its own investigations through a firm of accountants who concluded that there was no case to answer but, when Jooste returned from a business trip to Europe on Monday December 4 last year – two days after his two best horses, Legal Eagle and Edict Of Nantes, had fought out the finish of the Green Point Stakes – he was informed that Deloittes wanted a new investigation into the German situation before they would sign off the accounts which were due to be released later that week.

Jooste said: “It was clear to me that the Deloitte proposal would have a devastating effect on the value of the shares. I said to the supervisory board that they should announce unaudited results and replace Deloitte with a firm that was prepared to sign off the results by the end of January and so meet the deadline.”

Jooste warned the board that delaying the accounts with a further investigation – the first one had been going on for three years – would have “dire consequences for cash flow, the company’s credibility and investor perception.”

But that evening he was informed that the board had rejected his proposal and that there would be a new independent investigation into, Jooste told the parliamentarians, “accounting irregularities which to me means fraud – and that led to the immediate fall in the value of Steinhoff shares.”

Jooste spoke confidently throughout the near three-hour session and hardly refused a question despite coming under attack from some of his inquisitors. One told him: “There is no contrition (from you) and no apology to the thousands of people, including pensioners, who suffered major financial loss.”

He was also questioned, and by inference accused of lying, when his version of events was compared with the famous SMS that he sent to selected staff members on resigning as ceo. This stated: “I made some big mistakes... it is time for me to accept the consequences of my behaviour like a man.”

Jooste was adamant that this had been wrongly interpreted, explaining: “The mistake referred to was the choice in 2007 of a strategic partner that failed and which led to the perception of accounting irregularities and not being able to complete the financial statements in time.”

He added: “I never lied about the activities of the company. I have lost my whole career but it saddens me what happened to Steinhoff and the losses to pension funds and people all over the world.”

What happens to Jooste after this is unclear. He is still technically under investigation by the Hawks, South Africa’s police financial investigation unit, but whether they still feel they have a case they can win is debatable.

Certainly the parliamentary committee chairman was impressed, concluding his summary by telling Jooste: “More than any other person you have given us much detailed information on the sequence of events.”

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I have lost my whole career but it saddens me what happened to Steinhoff and the losses to pension funds and people all over the world
E.W. Terms
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