Markus Jooste received huge profits from Steinhoff land deal a decade ago
Markus Jooste, who quit as head of Steinhoff International Holdings in December amid an accounting scandal, oversaw a complex series of transactions in which decisions made by the South African retailer benefited him personally, company filings show.
In a set of property deals reviewed by Bloomberg, companies linked to Jooste and Steinhoff associates profited by hundreds of millions of rand between 2002 and 2007. Steinhoff said it has handed information about Jooste to the police and the former CEO hasn’t spoken publicly since quitting the company, despite being summoned to appear before parliament twice.
His lawyer Callie Albertyn said at the time that Jooste wouldn’t appear because any statements he made could undermine his right to a fair trial at a later date because he believed he would probably be prosecuted.
With Jooste at the helm, Steinhoff began buying Johannesburg-based logistics firm Unitrans in 2000. Two years later Unitrans, with Jooste and Steinhoff’s current acting CEO Danie van der Merwe on its board, sold the land on which dozens of car dealerships were based to a closely held company that later made payments that ultimately went to a firm Jooste controlled.
In 2007, Steinhoff bought some of those properties from the Jooste-linked company at a multiple of their original value and the profit eventually flowed to another firm controlled by Jooste.
The series of deals and the layered company structures are an example of how the assets of Steinhoff, which has lost 97% of its market value since disclosing the accounting irregularities in December, may have been used to benefit Jooste and some of his associates.
While Steinhoff said it forwarded information about Jooste to the Hawks earlier this year, it’s not clear whether criminal probes have started. PwC, called in by Steinhoff in December to investigate the finances, has said it’s probing at least as far back as 2015.
In addition to Jooste and the man who became his son-in-law, Stefan Potgieter, several Steinhoff executives were directors of the companies that moved the proceeds of deals to Mayfair Speculators, at which Jooste was the only director in 2007, filings show. Mayfair bought racehorses and luxury estates.
Unitrans referred queries to Steinhoff, while Steinhoff said it can’t comment until the investigation it commissioned PwC to carry out is complete. Jooste’s lawyer, Albertyn, didn’t respond to questions sent to him by Bloomberg. Van der Merwe said he has been advised not to comment on matters that may be subject to the investigation, with which he is co-operating.
The steps below show how the money was moved:
An example of the over-valuation of the 33 properties sold by Erfvest to Steinhoff can be shown in the transactions linked to one plot, 28 Lake Avenue in Benoni, east of Johannesburg.
The land, a little bigger than two tennis courts, is on a street lined by dilapidated buildings in an industrial area. Three nearby stands on the road sold for an average of R670,000 in 2007, online records at Property24 show. Clidet bought it in 2002 for R4.79m and, after changing its name to Erfvest, sold the plot to Steinhoff’s property unit in 2007 for R33.7m, records show.
"‘The PwC investigation into Steinhoff will identify what went wrong and who is responsible. Everyone in the company, including me, is subject to investigations and findings" in the PwC probe, Van der Merwe said by e-mail. "I have fully co-operated with the investigation and will continue to do so."