Markus Jooste, the former head of retail giant Steinhoff, has been hit with a hefty fine for his role in a major accounting scandal that shook the company. South Africa’s financial watchdog, the Financial Sector Conduct Authority (FSCA), ordered Jooste to pay 475 million rand (roughly $25 million) after an investigation found he published false and misleading financial statements.
This news comes after Steinhoff revealed problems with its accounts in late 2017. The discovery of these issues sparked a wave of lawsuits and caused the company’s value to plummet. Steinhoff, which owns discount retailer Pepkor in South Africa, narrowly avoided bankruptcy last year by restructuring its debt.
The FSCA’s investigation determined that Jooste, along with Steinhoff’s former European finance chief, Dirk Schreiber, made or approved financial statements they knew (or should have known) were inaccurate. This included withholding important information from shareholders.
The penalty applies only to Jooste. While Schreiber was also found to have broken financial regulations regarding Steinhoff’s financial reports from 2014 to 2017, the FSCA acknowledged his cooperation with the investigation and opted not to fine him.
Jooste has 30 days to pay the fine, which includes 10 million rand to cover the FSCA’s investigation costs. This case serves as a stark reminder of the consequences companies and executives face when they mislead investors and the public.
