By Lehlohonolo Lehana.
@UnathiKamlana.
The Financial Sector Conduct Authority (FSCA) has issued a penalty of R475 million on former Steinhoff International boss Markus Jooste following an investigation, it said in a statement on Wednesday.
The penalties issued on Wednesday against Jooste and Steinhoff’s former European finance chief, Dirk Schreiber, are for having 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. This included the omission of material facts.
The FSCA found that Jooste and Schreiber contravened the Financial Markets Act (FMA) in respect of Steinhoff International Holdings Ltd and Steinhoff International Holdings NV’s annual financial statements and annual reports for the 2014 to 2016 financial years, and the 2017 half-year.
The Steinhoff International securities were listed on the JSE and the Frankfurt Stock Exchange during this period.
It is worth noting that between 2014 to 2017, Jooste earned more than R651-million from Steinhoff International alone.
The FSCA noted in the court order that he had received income from other sources during this time but failed to disclose that income despite being asked to do so.
The Financial Markets Act prohibits a person from directly or indirectly making or publishing any false, misleading or deceptive statement. The Act also prohibits the promise or forecast in respect of any material fact regarding the past or future performance of a company which has listed securities on a regulated market, and which the person knows, or ought reasonably to know at the time and in light of the circumstances in which it is published, is false, misleading or deceptive.
FSCA Commissioner Unathi Kamlana said that Jooste and Schreiber failed to deliver valuable information to investors, which concealed Steinhoff’s true financial position.
Kamlana said investors based their assessments of Steinhoff’s financial prospects on this false, incomplete, and misleading information, which resulted in material losses for investors and pension funds.
“This type of behaviour is wholly unacceptable, especially for experienced executives,” Kamlana said.
As part of his R475 million fine, Jooste must also pay R10 million in investigative costs payable in 30 days from 19 March 2024.
In arriving at this substantial amount, the FSCA considered the to deter similar behaviour in the market, the losses experienced by the market, Jooste’s level of cooperation during the investigation, the commercial benefit to Jooste and more.
The FSCA also said that it will open a case with the Hawks in regard to the matter.
As the investigation into Jooste and Schreiber concludes, the FSCA emphasises its commitment to ongoing scrutiny of similar contraventions by other individuals.