The former CEO of Steinhoff International, Markus Jooste has been given a 20-year ban from serving as a director. This ban, accompanied by two R7.5 million fines($441,000), comes on the heel of Markus’s involvement in the largest-ever South Africa accounting scandal.
The South African businessman received these humiliating sanctions from the Johannesburg Stock Exchange (JSE). According to JSE, Markus was found guilty of releasing financial statements that contained false, incorrect, and misleading statements. He was also blamed for not complying with International Financial Reporting Standards and the Listing Requirements.
Markus’s ban from serving as a director is an offshoot of Steinhoff’s accounting scandal. JSE believes that his failure at managing activities at the helm of affairs led to the company’s accounting scandal. Markus was also fined for fabricating an invoice that engorged Steinhoff’s income.
Markus Jooste’s career before the scandal
Markus started out as a trained chartered accountant. He first served as a financial director at GommaGomma. Serving at GommaGomma introduced him to several personalities. One of which was, German Entrepreneur Class Daun, who brought him up to speed on various business lessons. On the flip side, Markus facilitated a business merger between Daun and Bruno Steinhoff in Europe.
In 2000, Markus became the CEO of Steinhoff. He invested in several acquisitions that grew the small furniture manufacturer into a large corporation. Some of those acquisitions include Conforama for € 1,207 million, Mattress Firm for $2.4 billion, Poundland for £597m, and Pepkor for €4.8 billion. Reports say Markus’s problems began when independent analysts began to scrutinize the level of acquisition and the growth of his empire.
Markus was also ranked by Forbes in 2015, as one of Africa’s richest businessmen with a net worth of $400 million. Forbes in their report noted that Markus did a great job at transforming Steinhoff into “Africa’s Ikea” and the second-largest household goods retailer in Europe.
Markus and the Steinhoff scandal
People familiar with Steinhoff operations claimed that Markus played an integral role in Insider trading which dates back to its initial public offering in 1998. Daily Maverick reports that in November 2016, Markus created a fake handwritten document that claimed pro rata contributions worth € 23.5 million. They claimed Markus handed the document to the then chief financial officer Ben La Grange for onward generation of a false invoice meant to be issued to the TG Group for processing.
The fictitious invoice inflated Steinhoff at Work( a subsidiary of the holding company) for 15 months.
Markus and JSE ruling
JSE ruling means that Markus will be publicly censured and barred from holding any directorships. Also, Markus, the face of South Africa’s largest scandal is scheduled to stand trial in Germany in 2023 on charges of accounting fraud. These charges originate from PwC forensic report. The report found that top executives at Steinhoff overstated profits between 2009 and 2017.
Markus Jooste’s fall from grace is a lesson for every excelling businessman who intends to last long in the good book of financial analysts.
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