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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. The two businesses merged through the 50:50 joint venture, he explained.

Later the partnerhsip expanded to other territories.

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. This transaction red flags were raised, he explained and led to a fallout in November 2014. The relationship with Seifert was terminated in January 2015.

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

One case is still open in Vienna, where a shortfall owed to Seifert through the Conforama acquisition is being disputed, Jooste said.

Steinhoff biggest corporate failure of SA – Jooste

Jooste said that Steinhoff is the biggest corporate failure in SA, and not a 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,” he said.

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

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

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

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. 

Steinhoff cut off communication with Jooste

Former Steinhoff CEO Markus 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 FSB 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. 

Jooste has not been in contact with Steinhoff since resignation

Former Steinhoff CEO Markus Jooste says 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- and only the investigations he was involved in. 

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. 

He has been part of 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 members of Parliament.

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 witha 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.

“The financial loss devastated to a lot of people.’

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. 

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 witha 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.

“The financial loss devastated to a lot of people.’

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. 

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 no wrongdoing.  

“I was not aware of any accounting irregularity in the books of Steinhoff,” Jooste said- referring to Deloitte’s report. A probe suggests fraud, he said.

Investigation into accounting irregualrities- share price and credit lines happened.

 A new investigation proposed by Deloitte would delay the release of financial results on December 6. A 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.

He explained that in addition to not announcing results on time- the remaining queries about accounting irregularities even though the outcomes of a 2-year independent investigation were concluded then another investigation is proposed, then all confidence is lost and the share price will drop.

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.”