Former Steinhoff CEO Markus Jooste. Picture: ESA ALEXANDER/SUNDAY TIMES
Former Steinhoff CEO Markus Jooste. Picture: ESA ALEXANDER/SUNDAY TIMES

It must have been excruciating for representatives of the Le Toit Trust to listen to former Steinhoff CEO Markus Jooste’s legal team spend 30 minutes arguing about the precise value that underpinned the R740m damages claim the Trust had lodged against Jooste. Was it the market value? The true value? Or the true market value?

For those unencumbered by legal training, which includes the majority of the hundreds of thousands of investors who became significantly poorer in December 2017, the value issue was obvious. In November 2017 they could sell their Steinhoff shares for R65 apiece; by April 2018 they would have received no more than R1.20.

The Le Toit Trust is, of course, considerably more detailed in its claim. However, not sufficient to avoid the commonly used legalistic charge of “vague and embarrassing”.

Jooste’s team want the judge to order the Trust to address the lack of detail or, better still, dismiss the claim. Ironically, as the trust’s legal team pointed out, Jooste was the only person who could provide the details being sought by Jooste’s legal team. Similarly, he was well-placed to provide the details — the where, when and how — around the claims of “misrepresentation” being sought from the trust.

Remarkably, given that it’s been almost two years since R200bn of “value” was wiped off the Steinhoff share price, last week’s expedited high court action was the first directly involving Jooste. The three-hour affair was entirely procedural and while there may have been some comfort in knowing the alleged mastermind behind the Steinhoff collapse was finally being challenged, it quickly became apparent that this was going to be an extremely long war of attrition.

It will be determined less by the “rights and wrongs” of the matter, a “vague and embarrassing” concept if ever there was one, and much more by whose money lasts the longest. As acting Judge Frances said, alluding to a whole series of procedural challenges that could be launched in the future, “this is the start of the beginning of a fairly long process”.

One issue alone, that of causation, presents potential for years of delay and millions of rand in legal fees. The Trust will have to prove its R740m loss is directly attributable to Jooste. Should the auditors not share some responsibility? What role did the Viceroy report play in the collapse of the Steinhoff share price? And what about the effect of Christo Wiese’s forced sale of Steinhoff shares?

Just how long a legal battle will depend on Jooste’s financial resources, which some say are almost unlimited; others say he might struggle after a few years. If some of the many other aggrieved parties — such as Steinhoff, GT Ferreira and Christo Wiese — proceed with the actions they have launched, Jooste will be forced to disperse legal fees on a number of fronts. In addition, although the chances are slim, we should not ignore the possibility of criminal charges. It is possible Jooste may end up Gary Porritt-style, running out of money and fighting his court battles without a legal team.

Of course, it is important to remember that while Jooste has effectively been deemed guilty by the court of public opinion and also by the PwC-led R2bn, 18-month forensic investigation, he has not been found guilty by a court and so is innocent. As Jooste’s legal team told the court last week, “even a defendant like Mr Jooste” is entitled to proper legal process.

It’s also worth remembering that the Financial Sector Conduct Authority has found no evidence of insider trading in Steinhoff shares before its stock collapsed. The authority might be encouraged to look a little closer after revelations in last week’s court papers that Jooste had tipped off the Le Toit Trust to a possible crash in the share price just days before the dramatic announcement of “accounting irregularities”.

Inevitably our legal system will be on trial as much as Jooste will be in the coming years.