South African news today

SOUTH AFRICA – August 2008: Markus Jooste, CEO of Steinhoff. (Photo by Gallo Images / Financial Mail / Jeremy Glyn)

Disgraced former Steinhoff CEO Markus Jooste set for grilling in Parliament

The chickens are coming home to roost for Markus Jooste. The former Steinhoff chief can’t squirm his way out of this one…

South African news today

SOUTH AFRICA – August 2008: Markus Jooste, CEO of Steinhoff. (Photo by Gallo Images / Financial Mail / Jeremy Glyn)

One of the most devastating financial crashes in South Africa’s recent history is going to be laid bare, after former Steinhoff CEO Markus Jooste was summoned to Parliament on Tuesday.

What caused the Steinhoff crash?

Jooste was forced to resign over “accounting irregularities” back in December. The company were due to release their financial results around the same time, but its postponement spooked the economy good and proper.

Steinhoff lost around 90% of its market value, which TimesLive reported was around R194 billion. Spare a thought for major shareholder Christo Wiese, too. The retail magnate lost R32 billion within the first 24 hours of the crisis becoming public knowledge.

What did Markus Jooste do?

However, the reasons behind the crash have been kept behind closed doors. Sygnia Asset Management CEO Magda Wierzycka called it “as close to a corporate-structured Ponzi scheme as one can get”.

Thankfully, we’re about to receive a lot more clarity on this one. Speaker of the National Assembly, Baleka Mbete, gave the green-light to the financial portfolio committee to summon Jooste and co.

Moloto Mothapo is a Parliamentary spokesperson. Sharing comment with BusinessLive, he told the publication why Parliament felt like they have to intervene with this situation:

“Parliament and its committees are empowered to summon not only state organs to account to parliament‚ but any private person‚ institution or regulatory body to provide evidence on any legitimate matter of public interest [that] falls within the scope of their oversight mandate.”

“The mandate of parliament is to make laws‚ provide oversight and promote public participation to‚ among other [things]‚ protect the citizens‚ advance their development and prevent any recurrence of instances like the calamity of the collapse of the Steinhoff’s share value‚ with wide-ranging implications.”

When will the Steinhoff case be heard in Parliament?

The clandestine nature of Markus Jooste and his destructive business decisions are sure to be a huge source of interest. Parly want him and former CFO Ben la Grange to face the music before the end of next week.

La Grange looks the more likely to play ball, here. Although he’s ruled out the scheduled date of Wednesday 29 August, he has at least shown a willingness to comply. Which is more than can be said for Jooste.

His lawyers confirmed that he’ss refusing to attend a committee meeting on the grounds that it might prejudice any future criminal or civil case against him. Shame, these rich boys don’t handle failure well, hey?