• Over three years since Steinhoff’s share price plunged when the first signs of an accounting fraud scandal were uncovered, charges have at last been brought against three former executives. 
  • German authorities have not released the names of the accused. 
  • The German probe into the retail conglomerate is separate from a still-ongoing investigation into fraud and money laundering being conducted by the Hawks.

Three years and two months since Steinhoff’s share price plunged at the start of South Africa’s largest-ever private sector accounting fraud scandal, three former Steinhoff executives have at last been charged – in Germany.

While Steinhoff is headquartered in South Africa, it has its primary listing on the Frankfurt Stock Exchange (FSE).

German authorities on Thursday announced that the three were being charged with balance sheet fraud between July 2011 and January 2015. 

The public prosecutor’s office in Oldenburg, Germany, did not name the three former executives. Martin Rüppell, Oldenburg’s chief public prosecutor and press officer, directed queries to Oldenburg Regional Court. In response to a request for comment, the court said it could not share the names due to the presumption of innocence.

The three former executives stand accused of placing sham “profits” from fake transactions onto the balance sheets of legitimate subsidiaries of the group.

According to the charges they are facing, they carried out “balance sheet manipulation” of more than €2.3 billion.

A fourth accused, who appears to not have been employed at Steinhoff, has also been charged by German authorities for their involvement in two companies that had dealings with the three ex-Steinhoff executives. 

The German probe into Steinhoff is separate from an investigation into fraud and money laundering between 2009 and 2017 being conducted by the Hawks, who have not announced any charges yet.

On Wednesday Justice Minister Ronald Lamola, answering questions in the National Assembly, denied that the National Prosecuting Authority was dragging its feet, saying the “highly complex” probe had been prioritised, and suspects would be charged once investigations were finalised.

The German probe into Steinhoff commenced in late 2015, when the conglomerate moved its primary listing from the Johannesburg Stock Exchange to the FSE.

While Steinhoff’s former CEO Markus Jooste has not been named, Bloomberg reported on Thursday that Jooste was among those charged, citing a source “familiar with the investigation”. 

Steinhoff’s former CEO has been keeping a low profile since his abrupt resignation in December of 2017. While he has refused requests for media interviews, in 2018 he denied any wrongdoing related to the company he ran for more than a decade, when he appeared before Parliament.

According to a source, soon after his resignation he moved into an expansive house in Hermanus, and has been splitting his time between the seaside town and his son’s place in Cape Town. The 7 000 square metre Hermanus property, as Fin24 previously reported, spans two plots and is valued at over R81 million.

His South African lawyer, Callie Albertyn, told Fin24 on Thursday that Jooste has no comment. 

According to German financial news publication Manager Magazine, which broke the news of the charges against former top Steinhoff executives earlier in the week, Jooste’s legal representative is named Bernd Groß. Groß is quoted in the magazine article as saying said he was confident he would be able to resist the charges. He did not reply to a request for comment from Fin24.

In October of 2020, Jooste was fined R122 million by market regulator the Financial Sector Conduct Authority (FSCA) for insider trading. Jooste has taken the matter on review, and the payment has been stayed temporarily. 

He is also being sued by Steinhoff itself for close to a billion rand in a claw back proceeding. The group wants its former CEO to repay bonuses, “irregular payments” and the value of shares awarded to him since 2009. Jooste is opposing the claim, and a trial has not yet started. 

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