While current media reports run rife with the suspicions by the SA Reserve Bank (SARB) that the lavish lifestyle of Markus Jooste’s lover, Berdine Odendaal, was funded by the illicit gains of stolen Steinhoff money, court documents show that the central bank blocked her bank accounts and attached two of her cars and four properties registered in her name last year, because she was in contravention of exchange control. They don’t provide any more details than that.
More recently, the actual Godfather himself, had any physical asset linked to his name either catalogued or confiscated, and every database, document or device cloned or copied for further analysis.
But neither Jooste or Odendaal has been criminally charged for the above mentioned exchange control violations.
Odendaal also has an arrangement with the SARB to cover her monthly living expenses of around R150 000 a month. But a new dispute shortly arose after the two parties came to that arrangement on whether the total included her legal fees.
In February Odendaal initiated legal action against the SARB in an effort to recover the cash from the bank. But according to court documents, the SARB now says that Odendaal “repudiated“ the undertaking with the bank to allow her access to R150 000 a month. So not only has she lost her monthly allowance, but is still on the hook for paying her lawyers for their legwork.
Furthermore, the bank account in question is almost depleted as well, the SARB stated.
But even though Odendaal has not lost her assets for good, the taps of cash flow have dried up for now, so some might see some justice in that outcome.
Just like Odendaal, Steinhoff shareholders have also paid a significant price for somebody else's sins.
According to Andre Visser, a director of Issuer Regulation at the JSE, the bourse imposed fines in the amount of R13.5 million against listed Steinhoff entity for its previously published financial information, which did not comply with IFRS.
He says it was, in the view of the JSE, incorrect, false and misleading in material aspects: relating to its failure to disclose the sale of Steinhoff Global Investments and the sale of the Kika-Leiner retail business operational rights on JSE Stock Exchange News Service and in the company’s 2016 financial statements.
He added, however, that the suspension on the JSE of the listing of Steinhoff Investment Holdings preference shares was lifted on January, 18, 2021, and that the JSE does not have the authority to investigate and prosecute any criminal activity such as fraud and crimes of this nature in the country, and are the sole responsibility of the SA Police Service and the National Prosecuting Authority.
But criminal intent aside, Jooste is yet to cough up one single cent for anything untoward.
The Financial Services Conduct Authority (FSCA) says Jooste has still not paid the fine imposed by the regulator back in 2020 for trading insider information in contravention of the Financial Markets Act (FMA). The transgression in question was the warning SMS he sent to friends in 2017 to sell their shares a week before the group’s stock collapsed.
The FSCA Enforcement Division stated in a written response to Business Report’s questions, that it was subsequently instructed by the Financial Sector Tribunal to recalculate the amount of the penalty, following a Tribunal order dated December 13, 2021 in this regard. A copy of the order is available on the Tribunal’s website.
“The FSCA is busy with this second enforcement process with regard to Jooste’s insider trading penalty and it will be concluded soon,” they added. “The news of the new penalty will be published by the FSCA once the enforcement process is completed.
The FSCA published a press release previously detailing the administrative penalties that it imposed on Jooste and three others, the first time around, amounting to about R241m, relating to share transactions in Steinhoff International Holdings during November and December 2017.
According to the FMA, and in the case of an offence of insider trading such a penalty has to be paid into a specially designated trust account that is administered by the FSCA. The penalty is calculated as per the provisions of certain sections of the Act.
The Act states that the FSCA is entitled, as a first charge against the trust account, to reimbursement of all expenses reasonably incurred by it, in bringing such proceedings and in administering the distributions made to claimants, and of the FMA provides for the distribution of the balance to all claimants.
The regulator, however, did indicate in its written response that it does not have the executive power, in terms of the applicable legislation, which includes the Financial Sector Regulation Act, to suspend the executive powers of any legal person in the case of market abuse offences.
“The FSCA might request a court to appoint a curator in the case of other offences investigated by the FSCA (FAIS contraventions, etc.) but it will not be applicable in the case of market abuse offences,” it said. “The FSCA will in the case of market abuse offences, inform relevant authorities (ie. CIPC, the SAPS, IRBA, etc.) about its findings.”
According to FSCA records, the penalties initially imposed by the FCSA were against Jooste for R161m, of which he was liable for R122m; Dr Burger for R3m; Mr Swiegelaar for R18 000 and Ocsan Investment Enterprises for R115m - all for either dealing in Steinhoff shares for their own or another's account while in possession of inside information.
Business Report could not confirm whether these related parties have paid their dues.
The decisions by the FSCA to impose the administrative penalties can be reconsidered by the Tribunal. Jooste and the other recipients of the administrative penalties may apply for the reconsideration of the decisions of the FSCA.
The consequences of insider trading may include more than four times the monetary benefit derived, criminal sanction and civil liability. A juristic person, such as a company, can commit and be liable for insider trading. The limit of an administrative penalty is a multiple of the monetary benefit derived, which means that a profit of R250m derived from insider trading could result in an administrative penalty of more than R1bn.
Jooste, resigned from Steinhoff in late 2017 when the first signs of a major accounting scandal came to light, and remains untouched ever since.
BUSINESS REPORT