2023-04-19 15:20:11
In South Africa, statements made by former Steinhoff boss Markus Jooste at the start of a long-awaited court case in Germany met with a lack of understanding. A Justice Department spokesman said Jooste, who was accused of accounting fraud, was allowed to leave the country. In principle, the Ministry cannot prevent anyone from doing so. The relevant authorities will be contacted and asked for clarification. Jooste did not hand in his passport because he was not charged in South Africa.
The 62-year-old former boss of the furniture company did not appear in the Oldenburg district court on Tuesday’s first day of the hearing. His legal team said a 2017 deal with the South African Ministry of Justice prevented his departure. He should have received official permission to do so. The authorities there had not given any assurances that their client would not be arrested if he tried to leave the country. The public prosecutor’s office in Oldenburg was not convinced and applied for an arrest warrant. According to media reports, Jooste had enough time to apply for a visa. The German authorities filed charges two years ago.
The case revolves around one of the biggest economic scandals in South African history. Jooste resigned in December 2017 after auditors refused to sign off on the company’s financial statements. He had admitted “big mistakes”, he now had to “bear the consequences like a man”. At that time, the first suspicions about falsification of accounts in the billions were raised in Germany. After the resignation, the group lost almost all of its value in a very short time.
Disguised losses and embellished gains
Steinhoff, founded in 1964 by the German entrepreneur Bruno Steinhoff, had risen from South Africa to become a leading international furniture retailer and was considered a great success story, especially in South Africa. In its heyday, Steinhoff was described as the second largest furniture group in the world after Ikea. In 2015 the company went public on the Frankfurt Stock Exchange.
According to a report from the district court of Oldenburg, Jooste is said to have instigated former managing directors of German subsidiaries “to incorrectly present the balance sheets” in five cases. The procedure for another alleged act was not opened due to the statute of limitations. Losses at various subsidiaries were concealed and alleged profits for the entire group realized through “hard-to-understand bogus transactions with an unmanageable network of companies” and an “excessive valuation of fixed assets”, it said. As CEO, Jooste demanded a certain group result and needed the corresponding figures from the European part of the group. The results of the European subsidiaries were determined in advance in order to then calculate the required amount of profits to be manipulated.
The process is also being followed with great attention in South Africa. At the same time, questions were raised again this week as to why the South African public prosecutor’s office had not yet brought charges. It is a big step in the right direction that Jooste is on trial in Germany, wrote the well-known opposition politician and former Prime Minister of the Western Cape, Helen Zille, on Twitter. “But when will that happen in South Africa?” Other commentators called an indictment and conviction an important signal that domestic courts are also prosecuting white and wealthy criminals. Jooste once belonged to the Afrikaans-speaking business elite, which mockers refer to as the “Stellenbosch mafia” because they come from the wine and university town or – like Jooste – have close ties to her.
Other institutions in South Africa have responded to the scandal. In October last year, the central bank confiscated 1.4 billion rand ($75 million) in Jooste family property, including a mansion, a more than 300-year-old winery, cars, artwork and jewelry. The reason was violations of the country’s strict foreign exchange controls. The Johannesburg Stock Exchange banned Jooste from serving on the board of a listed company for the next 20 years, while the Financial Regulator imposed a penalty for insider trading. In 2018, the publicly shy former manager also had to make a statement in the South African parliament, where he again rejected the allegations. The appearance had been eagerly awaited, as now in the court in Oldenburg, but had no apparent consequences.
A decision by the district court on an arrest warrant is expected in a few weeks. Until then, the procedure is suspended. If there is an arrest warrant, Jooste could be extradited by the South African authorities. However, it is to be expected that he will use all available legal means to prevent extradition.
The co-defendant, 72-year-old George Alan Evans, appeared in court on Tuesday. The former British banker has denied allegations that he helped with the sham transactions. He did not suspect any violations of the law and cannot remember exactly what happened more than a decade ago. The court temporarily stopped the proceedings against him against a payment of 30,000 euros.
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