FSCA imposes R475 million penalty on Jooste for Steinhoff accounting irregularities
The Financial Sector Conduct Authority (FSCA) has imposed a R475 million penalty on former Steinhoff CEO, Markus Jooste, after concluding that he contributed to the publication of misleading or deceptive financial statements about the company.
Steinhoff was rocked by an accounting scandal in 2017, with audit firm Deloitte confirming the accounting irregularities.
The accounting fraud at Steinhoff which included misrepresentation of its financial status, resulted in severe losses for South African investors.
Now, the FSCA has today issued a penalty of R475 million to Jooste after what it says was a “thorough" investigation.
The R475 million penalty against Jooste, which includes a R10 million reimbursement to the FSCA for costs incurred in its investigations, has to be paid by April 19 and will attract an 11.75% interest until it is paid in full. Criminal proceedings are also being opened against Jooste by the FSCA, it confirmed.
“The investigation found that Jooste and Dirk Schreiber made or published false, misleading, or deceptive statements about Steinhoff International Holdings Limited and Steinhoff International Holdings NV, which they knew or ought reasonably to have known were false, misleading, or deceptive. Such publication included the omission of material facts,” the FSCA said on Wednesday.
Schreiber, who was chief finance officer for Steinhoff Europe however escaped financial sanctions from the FSCA as he had cooperated with investigations into the company’s accounting irregularities.
The FSCA said due to the extent of Schreiber's co-operation with the investigation, the FSCA was not imposing an administrative penalty on him.
In its decision to levy the R475mn administrative penalty on Jooste, the FSCA considered the amount of the losses experienced by the market, Jooste’s level of cooperation during the investigation and the nature, duration, extent and seriousness of the contraventions. It also considered “the need to deter similar behaviour in the market” and the effect of “Jooste’s conduct on the financial system” and financial stability.
BUSINESS REPORT