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Markus Jooste told friends to sell their Steinhoff shares before collapse

Message sent by Jooste days before retailer’s accounts crisis.

Former Steinhoff International Holdings NV Chief Executive Officer Markus Jooste advised friends to sell the South African retailer’s shares days before the stock collapsed, according to a mobile phone text message seen by Bloomberg.

The message, sent around November 30 to at least two people, told recipients there was impending, unspecified bad news coming. At the time, Steinhoff was in discussions with Deloitte LLP about the viability of its accounts. On December 5, the company said it had uncovered accounting irregularities and that Jooste had quit, causing the shares to plunge 63% in a single session.

South Africa’s financial regulator has been made aware of the message, two people familiar with the situation said, asking not to be identified.

Jooste didn’t respond to a phone call and message seeking comment. Callie Albertyn, a lawyer for the former Steinhoff CEO, didn’t respond to emailed requests for comment. Steinhoff declined to comment.

“The Financial Sector Conduct Authority is conducting comprehensive investigations into possible market abuse offenses regarding Steinhoff International Holdings NV,” Solly Keetse, head of market abuse, said in an emailed statement on Wednesday. “All information regarding these investigations are confidential. The investigations are ongoing.”

Austria dispute

Speaking to lawmakers in Cape Town last month, Jooste, 57, said he wasn’t aware of any financial irregularities on the day he resigned. He instead blamed the crisis on a protracted dispute with Austrian business partner Andreas Seifert, which triggered investigations into Steinhoff by European regulators and tax authorities, which are ongoing. Steinhoff largely settled the impasse with Seifert by selling half its German furniture chain POCO to Seifert, who had filed lawsuits against the retailer in three countries.

Steinhoff’s shares have lost more than 95% since December, and fell 5.1% to R2.23 in Johannesburg Wednesday. The owner of Conforama in France and Poundland in the UK has restructured about 10 billion euros ($11.5 billion) of debt to stave off collapse. Last week, the company’s US bedding chain Mattress Firm filed for bankruptcy and announced a plan to close as many as 700 stores, the culmination of financial difficulties that predate the Steinhoff crisis.

Read: Mattress Firm bankruptcy is a corporate nightmare

115 percent premium

Jooste referred to trouble with Steinhoff’s business in the US in his text message. Steinhoff expanded there with the purchase of Mattress Firm for $3.8 billion in 2016, a 115% premium, part of an aggressive expansion plan overseen by the ex-CEO.

It’s not clear whether anyone who got the text acted on its contents. On November 30, 14.4 million shares changed hands, compared with a 15-day simple moving average of 13.9 million in 2017 up until December 6. The figure soared to 33.4 million shares on December 5, just before the irregularities were announced, but by then Deloitte had refused to sign off on Steinhoff’s accounts and this had been disclosed to the market.

South Africa’s FSCA is investigating Steinhoff share movements last year for possible insider trading. Steinhoff hasn’t commented on that probe.

In the hours before Steinhoff’s shock announcement, Jooste wrote other messages to some former colleagues and friends asking for forgiveness for his role in the scandal and named four fellow executives that he said had nothing to do with any of his mistakes, said a third person, who declined to be identified.

When asked in the South African parliamentary hearing what mistakes he was referring to, Jooste highlighted the 2007 decision to partner with Seifert. That move “cost the company since 2015 all the drama that it went through, the fights, the financial losses and also that lead to this perception of accounting irregularities,” he told the lawmakers.

Steinhoff has hired auditors at PwC to probe its accounts, and unpublished findings from the ongoing investigation has prompted the company to report Jooste to a South African police unit known as the Hawks, although the law enforcement agency says it doesn’t have enough information to pursue a case.

The company is also being sued by investors including billionaire ex-Chairman Christo Wiese, and is being investigated by regulators in Europe and South Africa. Steinhoff has acknowledged the lawsuits and investigations.

© 2018 Bloomberg L.P

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When does this man go to jail?

Exactly, been clear all along he knew what was going on and now there is sound proof he lied about it. Send this crook to jail already!!

He should be in the cell next to Nicky Newton-King.

When does the “Merry Lot” ….. Weise, Jooste, Ben Le Grange, Danie van der Merwe, Audit Committee members, other board members, and non exec board members at the time get charged with fraud, corporate thief, money laundering, inside trading?

Sadly, such will never happen in S.A. as ALL the “regulators” and NPA are toothless and dysfunctional.

The JSE should be sued and ALL execs dismissed immediately.

Sell ALL equity listed on the JSE.

The JSE had no integrity on Steinhoff and it was conflicted implying really, it’s a conflicted boys club or play area. If it was any other company, they would have halted trading of the stocks but they did not so that brothers and friends could be able to short (hedge) the stock and exit as if nothing had happened (does anyone heat the banks crying over the losses when they were directly and indirectly significantly invested?).

The net will soon spread very soon to KAP and watch their CEO also get implicated. Some of the business now under KAP were part of Steinhof and the rot and mischief started way back. KAP was formed to seperate the manufacturing arm of Steinhof.

Well, I don’t know what you know. But one thing for sure.
You can’t swim through shit and come out the other end smelling like a rose.

You really have to ask yourself how Wiese could not have known. The truth will out in due course – it always does. What a despicable bunch.

Will you knowingly put your life’s work and a ton of borrowed money into a fraudulent enterprise? Seriously…

I want to know who the friends were!

Yeah, no problem if your life’s work has itself been a fraud. The more your schemes succeed the bigger and more complex they become and the more extensive the collateral damage.

No doubt the friends were of an ilk. Otherwise why warn them and only them?

Mr Wiese and Tollgate always come to mind!

Agree – what total SCUM. And these were people many saw as ‘top drawer’ / highly sophisticated icons of business and people to emulate if one wanted to be successful. They are worse than any of the Zupta crew. The big question is how many of our other icons of business are, or have been, involved in similar schemes and machinations?

Money, share prices and AFR’s clearly cannot be taken at face value and do not maketh the man…

Jooste did not warn me to sell my shares….Now this ruins our friendship!

*lol* yes, same here.

Markus, when you join us again for the next social braai, please bring your own meat this time around. Thank you!

Lucky me. I never had the moneys to go to the casino for grown-ups.

then Wiese must have known….he now must be the biggest destroyer of wealth in SA…SNH, IVT, SCP…etc

off course…that’s why suitcaseman keeps a low profile.

You really think he planned this? That would be more interesting news than being caught with a suitcase of cash in Heathrow.

This man must be arrested and put into jail along with Shivambus, Zumas and Guptas!

extradite this basterdo to the Netherlands. They will know how to deal with him.

Dutch dealing with crime. Not bad. For a murderer of a coming state president it is a lifelong state pension. His name, volkert. Parking, time overdue, or speeding, is more serious business. Santa Claus, zwarte Piet, really, pro voting, they, good green left people, hang you. Jooste, his view of this business world, will get him a life long membership of Bilderberg.

“…mobile phone text message seen..”

Markus…Markus, my friend…come on, please stop using SMS-service on your phone.
How many times I told you to download and use WhatsApp (encrypted) instead.

Jooste and his fellow thieving swine must be liquidated of every single asset, put in shackles and put in the numbers section of Polsmor, to pay for all the misery they have caused

Words don’t come easy.
But what goes around comes around.
I still respect him as a human being because he tried his best.
As a friend I could shelter him because I could if I would.
When you put shit on your plate I guess you take a spoon keep the face and eat it.
“said the parrot to the monkey after this one pulled the cap”

Yes Wiese and Tollgate come to mind. So does the Wiese Mervyn Key Lawrie McIntosh combo of Tollgate. These men went on to establish Pinnacle Point Group as well. Both of them had pension money invested in them, Both of them had massive directors loans, Both of them had same liquidators, Both of them were struck by a bolt from the blue when they received 24 hour notice liquidation summoned. Hmmm. Some real similarities to Steinhoff in my humble opinion. There are rumours of real investigations into all three being launched.
Let’s see.

It wasn’t MJ quitting that caused the share price to collapse by nearly 70% it was the fraud perpetrated by all the Steinhoff heavies. They are all complicit..including their Auditors, but the biggest criminal of all is JZ and the ANC who created an atmosphere of panic, theft and fraud that made it ok for these boys to rob and plunder from the SA shareholder and the banks. We all take our que from above…if the President of a country behaves badly, it affects the Morals and Ethics of everyone.

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