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Steinhoff: First criminal charges loom

Against three from within the group and one other person, following six-year criminal investigation by public prosecutor in Germany.
Attempts to prosecute disgraced former CEO Markus Jooste would involve extradition proceedings. Image: Mike Hutchings, Reuters

Three years and three months after the Steinhoff share price collapsed, following the disclosure of widespread ‘financial irregularities’, disgraced former CEO Markus Jooste might be about to face his first criminal charge.

While the latest move in this very long-drawn-out corporate scandal will be welcomed by Steinhoff shareholders, who suffered the pain of a R200-billion wipeout in the company’s market capitalisation back in December 2017, legal experts are not holding out much hope for any early court victories by prosecutors.

Share price wipeout

According to an article in a leading German magazine – Manager Magazin – the public prosecutor’s office in the city of Oldenburg in Germany has completed a six-year criminal investigation into “balance sheet manipulation”.

The investigation, which was launched back in 2015, was first flagged by Manager Magazin in an article published in August 2017.

Accounting fraud

At that time the report that German prosecutors were investigating Steinhoff and some other senior managers in connection with suspected accounting fraud rattled investors and knocked the share price.

However it was met by swift and indignant denials of any wrongdoing by the company.

Earlier this week Manager Magazin said that following completion of its investigation: “The public prosecutor’s office is bringing charges against three people from within the Steinhoff Group and one other person.”

If found guilty of balance sheet manipulation the three individuals face a maximum sentence of three years imprisonment.

Action in SA

Coincidentally, the day after Manager Magazin’s latest report, South African Minister of Justice and Correctional Services Ronald Lamola was in Parliament defending the SA law enforcement agency’s slow pace of action against Steinhoff.

On Wednesday he told parliamentarians that the National Prosecuting Authority (NPA) had not halted its investigation into the circumstances surrounding the company’s collapse.

Lamola dismissed allegations that the NPA is moving at a snail’s pace.


According to a news report on Jacaranda FM, Lamola said the NPA was dealing with the matter “without any fear, prejudice or any favour to anyone”.

He urged patience and reminded the MPs that this kind of investigation takes time.


One company law expert told Moneyweb on Wednesday that while the German authorities might be able to act speedily with regard to German-based individuals, any attempts to prosecute Jooste would involve extradition proceedings.

“Given his track record Jooste would fight this through every possible court in South Africa and that could take three to five years,” said the lawyer.

He said the best chance of getting Jooste into court lay with the NPA, but only if it focused on prosecuting just one criminal offence.

“The clearest one and therefore the one most likely to succeed is insider trading.”


On Wednesday a spokesman for Steinhoff told Moneyweb it is aware of the Manager Magazin article but could not comment on the details of any regulatory investigation.

However in the recently released 2020 Annual Report, the Supervisory Board said the company was fully co-operating with the various prosecution authorities not only in South Africa but in other jurisdictions.

“The Supervisory Board is eager that those responsible for past failings are brought to book and while we have a full appreciation of the historic events that took place at Steinhoff NV we are concerned at the slow pace of progress being made in this regard.”

The group says it is committed to maintaining “open communication lines” with all regulators.

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For some reason I do not have much faith in the NPA. Have they ever prosecuted a big wig kind of person? Oscar was the one and only. And the prosecutor that won that case left. There are so many investigations going on but nobody ever gets prosecuted.

SA has a FAKE justice system.

All smoke and mirrors and a waste of time.

Find something else to report on. This is just anc propaganda. They are pulling the strings and the journalists don’t seem to realize and jump at what is not even a story.


It’s is intesting to see how the corrupt ANC use Steinhof as a rationale for justification of their corruption and why bad eggs like Ace and Zuma must not be charged.

Strange cultural thinking regarding corruption. As if two wrongs make a right.

You get arrested and charged for shoplifting but can escape free to fight another day when you steal R200billion from shareholders? Just doesn’t make sense or seem fair.

Thanks Ann. Do you know whether SARS is pursuing this guy? It’s the logical atep surely.

You raise a very good point.

With each and every corruption case, be it in the public or private sector, there should be a simultaneos tax investigation and prosecution.

Crooks don’t steal money and then declare their illicit income in their tax return. If they allege is was a “gift” like our politicians are so fond of doing, at least they can then be nailed for donations tax etc.

Indeed. To prove tax fraud is much easier than to prove accounting fraud. Think Al Capone. But wait? How efficient is SARS vs the NPA?

Unfortunately one suspects Jooste was Celebes enough to stretch his tax avoidance to the extreme, he would not have been stupid enough to evade normal type income.

If I were SARS then then likely place to look is at how the central parties externalized their assets and whether those foreign trusts, companies, partnerships, LLPs etc abused transfer pricing and tax havens. Being SA tax resident all those foreign controlled entities are liable for inclusion here.

Sending out a request for information on a spreadsheet of names, dates of birth, ID numbers, company names, passport numbers, addresses including addresses of known service providers to all the usual foreign jurisdictions might yield a hit or two. Any bank anywhere is subject to FATCA / KYC and must share the data.

Germany could but SA could not???

Why? Probably just plain simple incompetence ho hum.

If Zuma and co are no where near being charged etc why should these guys be charged and jailed………oh I forgot it may be to do with the hue of the basal cell.

On a philosophical level, many use the Steinhoff fraud case as an example of the failure of capitalism with its profit motive, when, in fact, it actually proves the efficiency and superiority of capitalism over alternative collectivist policies.

To understand the argument, we have to look at it from the perspective of the consumer. The consumers were involved in a voluntary exchange with Steinhoff. They got value when they bought their mattresses, fridges, furniture and TVs. The consumers enjoyed all the advantages of capitalism as it provides the best products at the best price to satisfy the needs of the consumer.

The impact of financial fraud was isolated and ringfenced to impact on the “owners” of the business alone. The customers were not affected, they still own what they have purchased. The owners, as shareholders, suffered losses when the fraud became apparent. The losses were “privatised” in the hands of the owners, while the advantages and services were “nationalised” in the hands of consumers.

We should see this in the context of a socialist organisation, like the ANC, the government, the SOEs and municipalities for instance. The proceeds of fraud are ringfenced and “privatised” in the hands of the “owners”, or the politically connected cadres. The losses and the costs of the fraud are “nationalised” and borne by consumers, clients, voters, children, the poor and the sick members of society. The proceeds of fraud end up with the politician and government employee who enjoys a monopoly, to the detriment of the consumer, who overpays for an inferior product.

Where a capitalist organisation cannot survive without serving the consumer, socialism cannot survive without plundering the consumer. The difference in accountability between the systems determines the opposite effect and results.

Human nature does not change because we have different political/economic systems. The different systems merely incentivise and enables different behaviour patterns. Character failures and fraudulent behaviour will end up with either the owners of the business, or the consumers, depending on the political system.

A blessed day to you Sir

Years ago, My Physics lecturer instilled in me a lifelong habit, that; If a person seeks to be knowledgeable about a topic of any discipline of knowledge, the person has to critique it constructively to expose gaps (if any) of knowledge in what one is taught, that is how one becomes an Einstein, to not always accept everything one is taught as it is. If the past had all the answers, there would not be a need for the future.

I know I am still very far to be ranked alongside Einstein, but then my question to you is this,
Can Capitalism ever fail society?
We have seen recently in Texas how profit seeking energy capitalists failed society. The stock market crash of 1987 also referred to as Black Monday, The 2008 recession, how hedge funds kill off businesses but failed with Gamestop (when small retail investors did the exact, literally the exact thing hedge funds do, back to them this time).
Would you say those events are perfect examples of how Capitalism has devastated the lives of many?

In humility, i ask to profit knowledgeable gain from a knowledgeable man, and only that. Please do accept my constructive and benign engagement in this regard.


You make a valid point. Capitalism , will always trump communism. It is not without its flaws though.

In your example, the public also paid for the Steinhoff crash.

The PIC and pension funds suffered some huge losses. You probably lost money on steinhoff as well , if you had a RA.

Capitalism if applied properly, can only benefit mankind. However greed got in the way and in Steinhoff’s case, an overbearing and charismatic CEO, managed to hoodwink his colleagues and even the external auditors.

Opportunists abound and change the rules as when when it suits their ends, ergo, the Republicans will always protect BIG BUSINESS and the WEALTHY while the Democrats favour the little man.

You refer to the 2008 crash and mention hedge funds. Again the BIG BUSINESS favourably disposed US government came to the rescue of BIG BUSINESS. General Motors along with many banks and hedge funds, were the beneficiaries of this largesse. The US government should have stayed out of the fray and it should have allowed these companies to go to the wall; it would have shortened the duration of the depression that followed and would have winnowed out the weak.

That didn’t happen.

What happened is that the US taxpayers bailed out these failing companies.

Derivative trading has proved to be the Weapon of Mass Financial Destruction yet no regulations were put in place to prevent it happening again, but it did; Gamestop has proved it.

Capitalism needs regulation and it needs to be made accountable and also to develop a social conscience if it is to survive.

King Kahn, I replied to your comment with quite a detailed and lengthy post. Unfortunately, Moneyweb removed it.

The Oracle of RSA, everyone is a member of the public. Not everyone is, or was, an owner of Steinhoff though. The pension funds, RA’s, direct investors are all owners of the company. If you own a share in the company in your pension fund, then you are an owner. I manage my portfolio directly. I never owned Steinhoff. Consumers were not harmed in the Steinhoff debacle.

Cherise, people make mistakes, whether they are capitalist or collectivist. Capitalists pay for their own mistakes whereas consumers and citizens pay for the mistakes of socialist leaders.

The constant threat of bankruptcy is the biggest “regulation” and “social conscience” there can ever be to direct the policies of a capitalist organisation. Consumers interact with the company out of their own free will. They vote for the policies by spending their money on the products. What gives you the right to overrule the needs and decisions of millions of consumers merely because you believe that the company does not live up to your personal standards? You even have the right to open a business in competition with such an “immoral and unethical” company to profit from their bad business plan. You elect not to follow that route but to use the legislature, your vote, in other words, to influence the business plan of a taxpayer without showing any accountability for your potential errors in judgement. You make the decisions in other words, but other people must bear the cost. Sounds typical of socialism to me.

A further point in reply to the very valid points made by Cherise. Companies were bailed out because they were systemically important. Consumers are the ultimate beneficiaries of the financial system. According to Henry Paulson, the secretary of the Treasury at the time, the world was on the brink of a financial implosion that would have meant that credit cards won’t work and all bank accounts across the globe would have been frozen for months. No bank transaction, no fuel, groceries, online shopping or salary. Total financial chaos and huge human suffering would follow.

That brings us to the point – Who were actually bailed out by the Fed? The consumers were bailed out, by saving the financial system because the consumers are the ultimate beneficiaries who are dependent on the financial system. By providing liquidity to the banking system, the Fed saved millions across the globe from economic ruin and famine. That is the reality, although that does not fit the popular narrative.


I am a devout disciple of Capitalism even with the knowledge of how destructive it can be if left unrestrained. The truth of the matter is that not all businesses can be allied to a hedge fund’s/Investment Bank’s …etc business model, there will be some profit-seeking juristic casualties, that is Economics for us, it is cruel.
The humor and irony with the ‘08 disaster is that Capitalism was in need of a Socialist intervention to aid it back to health.
Your concluding statement is so well articulated, i am in full agreement and thank you for that.

How dareth Moneyweb depriveth me of your insight, unfortunate but understood. However, I Thank you for your effort, irrespective of its yield, i really do appreciate it Sir.

To your consequent insight to Cherise, I understand the concept of freewill, to do what one wills with one’s money and undertakings of setting up shop for competition. But i argue that, with exploitation absent, the ‘87 and ‘08 crash would not have happened. The hedge funds were vehemently against regulation (even pouring billions of dollars behind their fight) but during the Gamestop fiasco, they cried for regulation.
In Texas, the energy giants were against regulation and only recently they agree that they should have been regulated.
Certainly that is a vulnerability from the Capitalism front.

@King Khan – I must say – between you and Sensei I could not choose who/whom are the better with words. Your writing skills are impeccable.

Greed is probably the source of all evil and your fears RE Capitalism. If, for example, Bezos paid his workers a fair wage RE the value of the company and his take home pay, then your doubts would’ve been lessened? Bezos would argue that he could get any other person from the street to do the same job, but that is not the point. The top in the new capitalist world is getting to much versus the rest. I think that is why we think capitalism is failing, but in truth it should give the same opportunity to all players. Maybe the solution is to create platforms where new entrants can enter into the capitalist market easier and with some protection and to have laws that prohibit the big players of bullying tactics so that everyone can have a fair chance at capitalism – maybe that is the answer, for it is true that the market will dictate the winners and losers, but at least, make the game fair for all?

Lord Beerus
Thank you so much for your kind words. It is that kindness that motivates me to learn more and more from others on this platform as i have stated in my older posts. I am 29years old and there is a lot i learn from a lot older, more experienced, excellent and better minds here, so thanks again.

I do not doubt Capitalism at all, what i have been trying to point out is that, although it is a far superior economic-political system, it is not at all exonerated from being a source of woe to many families and lives. It has blood on its hands as well but i would not subscribe to any other alternative. Capitalism works, there is still much to be desired and improved upon, but it works nonetheless.

I believe Amazon has been paying fair and just minimum wages of $15 an hour since 2018. In achieving that, i would say it is the ‘social conscience’ @Cherise mentioned earlier and bowing to political pressure. This is a company that understands its PESTEL factors. The wage increment was in no way detrimental to Amazon’s balance sheet. Amazon’s 2018 revenue was $232 887Bn* and 2020 revenue figure was $386 064Bn*. When we factor out price, Increased revenue is a signal of increased labour production, which then justifies the $15/h minimum wage agreement. Those workers earned it and deserve it.

As for protectionist measures for small businesses… I am not in favor of. Amazon came from being a garage headquartered book store, Bezos took a chance and toiled hard to get to where he is. No political system was there to protect and support him, he deserves his spot. Coca-Cola was a joke of a company in its first year of trade, a dismal failure and no one was there to support them, look at them now. Google was an infant child who was not taken seriously, when it matured into a beast, Microsoft started crying foul. Larry Page and company deserve the market share that which they enjoy.

This is business, and our governor is Economics, there is no room for sympathy, only justice, you get what you deserve and if not, it only means greed and exploitation is at play. Matters of Restitution are then relegated to what we call politics (the literal meaning of being a servant of the people). Not everyone will own and run a successful company. In politics, everyone is told of how all men are equal (communists and socialists), Economics however, will soon burst that Disney bubble (capitalists).

Jooste’s got lots of (fraudulently obtained) cash. Hence he’ll be able to hire lots of legal teams to weave stories about how innocent he is and get him off the hook. Remember that the SA justice system is criminal friendly, especially to those with wealth and political influence. Note that a recent fraud conviction of person who “acquired” over R2m got six months suspended sentence. A person arrested for murder of a female got R1000 bail and was later found in possession of an unlicenced firearm. Persons jailed for twenty years for murder often get paroled after eight years, etc.

Someone fighting to stay in SA when offered a move to a top European country? This is a first.

Jooste would make Zuma’s Stalingrad defence look like a rushed school project

The South African justice system is run by the media.

These Steinhoff clowns (as with the Zupta clowns) will never see the inside of a jail cell.

Our statesmen are greedy. Money talks.

Non essential travel and no-one can compel him to be tested or vaccinated. The spineless regime of the well fed (and elegantly attired) Frau Dr Merkel is toothless against this guy. He will laugh at them as much as he laughed at ANC leader Carriem who was literally dismissed like an irritating flea.

Exceptionalism is such a fraud….We “Lie,cheat,steal” (POMPEO)

End of comments.





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