In years to come, before the dust finally settles on the Steinhoff implosion, psychologists will likely be poring over the details of documents like the one released by the Financial Sector Conduct Authority (FSCA) last week to find clues about how Markus Jooste’s mind was working in the days before tens of thousands of South Africans realised they’d been victims of a long-running fraud.
The 56-page order, which makes for fascinating reading, is available on the FSCA website here.
Of the four ‘associates’ who received what is now being described as the most expensive SMS ever sent, it’s impossible not to feel some sympathy for the chauffeur who, appropriately enough, seemed not to have much idea of what was going on and why he’d even received an SMS from Jooste.
It was four long days of increasing market speculation before he worked out what was going on and realised he hadn’t received the SMS by mistake. He sold his 400 Steinhoff shares, perhaps without a clue that in the high-flying world of finance that was absolutely the wrong thing to do.
Hardly a devious market manipulator, this chauffeur, but like so many of Jooste’s ‘friends/associates’ he is now considerably worse off for ever knowing him.
But the truly fascinating aspect of the SMS saga is what it might reveal about who Jooste considered important.
Only experienced psychologists will be able to cast some light on what might have been going through Jooste’s mind in the hours before he decided to send the SMS to four associates; it was five more days before he would send a similarly disturbing message to the board.
Were these four his closest associates or did he use other means to communicate the same message to his really close friends?
And then there’s the order in which the messages were sent to the four select individuals.
Jaap du Toit, Cape-based businessman and co-founder of PSG, was the first to get the SMS. Du Toit, who confirmed to the FSCA that he did not sell any Steinhoff shares*, received it at 10.38 on November 30, 2017; 26 minutes later Jooste decided to send it to Dr Gerhardus Burger; a full 52 minutes later, he sent the message to long-time friend and former Springbok Ockie Oosthuizen; and seconds after that he sent it to his driver, Marthinus Swiegelaar.
Why the delays?
Had Jooste gone out for a smoke in-between? Or had he been distracted by increasingly frantic messages from some or other member of the Steinhoff board?
Oosthuizen, who died last year, is the only one to deny receiving the message; cellphone records and the meta-data they generate indicate that Oosthuizen’s estate will have little success basing a challenge on denying the message was ever sent. And then there’s the uncomfortable fact that cellphone records also show that Oosthuizen contacted his broker within minutes of receiving the SMS. His broker sold all of Oosthuizen’s Steinhoff shares.
The FSCA said that during its investigation it looked into trading activity in Steinhoff derivative products as well as trading by parties related to “insider” parties.
Then there are the other nuggets – such as Jooste’s description, during his engagements with the FSCA, of the 2016 acquisition of Mattress Firm as one of the two biggest mistakes made by Steinhoff. He gave no indication what the other big mistake was, although he did state during his parliamentary hearing in 2018 that trusting his Austrian partner, Andreas Siefert, had been a big mistake. And it’s comforting to know that Deloitte US wasn’t happy about Steinhoff’s handling of the Mattress Firm accounts.
On a more prosaic note, cement producer PPC managed to get its integrated annual report out just in time to avoid a suspension by the JSE.
The annual report, which was released three trading days before the November 2 suspension date, reveals details of more value-destroying executives riding off into the sunset with their saddle bags stuffed with remuneration.
There was a lot of activity in Lewis shares during the week.
On Wednesday the furniture retailer announced that Invesco Canada had sold out completely, prompting a slide in the share price.
News on Friday that JP Morgan had lifted its stake to 10.38% and Coronation Fund Managers had hiked its holding to a hefty 27.6% came too late to save Lewis from recording a fall of 8.6% on the week.
A share that has done a little better on the back of offshore interest is MultiChoice, which closed the week marginally firmer after France’s Canal+ announced it had increased its stake in the Africa-based entertainment group to 12%.
Canal+ is no stranger to the wider MultiChoice group. Back in 1994 Naspers sold its European television businesses, contained in Dutch-based Nethold, to Canal+. That deal involved Nethold’s Middle East, Greek and African businesses being sold to MultiChoice.
Naspers and Prosus
Talk of Naspers inevitably prompts mention of Prosus’s latest big deal.
It has announced that it will acquire up to $5 billion in Prosus and Naspers shares, with the former getting up to $1.37 billion and the latter $3.63 billion. Investors were evidently pleased that Prosus is pursuing the most obvious and secure route to closing the value gap with Tencent.
Both shares – Naspers and Prosus – bounced up on Friday.
*This has been updated. The article originally stated that Jaap du Toit said he did not sell any Steinhoff shares.