Markus Jooste in parliament on Wednesday morning (James de Villiers, Business Insider South Africa)
  • In his testimony in parliament, former Steinhoff CEO Markus Jooste blamed Andreas Seifert for providing the trigger that collapsed Steinhoff's share price.
  • Steinhoff partnered with Seifert more than a decade ago, but the relationship soured and Seifert launched lawsuits against Steinhoff.
  • Jooste also took a swipe at Steinhoff's auditor, Deloitte.


In his testimony in parliament on Wednesday, former Steinhoff CEO Markus Jooste placed much of the blame for Steinhoff's demise on Austrian businessman Andreas Seifert, as well as the auditing firm Deloitte.

Steinhoff went into partnership with Seifert in 2007 to gain a retail footprint in Europe.

Seifert's interests in various furniture retailers were merged with that of Steinhoff, into a company called Poco. Jooste and Seifert then started working together on a number of transactions.

See also: 9 things you may not know about Markus Jooste, from his stint at SARS to ‘his and hers’ Bentleys

In February 2011, they bought the French furniture company Conforama. But Jooste said when Seifert was supposed to pay his part of the acquisition amount, he didn't have the cash. Steinhoff paid it on his behalf  - "I thought it was just a cash flow issue," Jooste says.

In 2013, Jooste says Seifert was the "instigator" who wanted them to buy the Austrian furniture group Kika/Leiner because it competed with Seifert's stores. 

But again, he didn't have the cash. Jooste says the "red lights then went on".

This led to a fall-out between Jooste and Seifert, and in 2014, he ended the partnership.

In a rare moment of contrition in his testimony on Wednesday, Jooste admitted to “my failure to pick a reliable strategic partner". 

Seifert then launched three lawsuits in the Netherlands, Austria and Germany, as he contended that Steinhoff did not acknowledge his shares in Poco and Conforama. 

"Seifert was the guy who went with all the information ... to the German tax authorities, which led to the investigation, which in turn led to the whole accounting probe," Jooste said.

The German tax authorities carried out a search and seizure operation in Steinhoff’s European offices near the end of 2015. Jooste said Seifert tried to use German prosecutors, the public perception and the media to gain a competitive advantage in the litigation processes in Austria and Netherlands.

Earlier this year, a Dutch court ruled that Steinhoff had to restate its accounts to reflect that Seifert owned 50% of Poco. (Previously, Steinhoff said it owned 100% of Poco.)

Deloitte's role

At the time, Steinhoff gave its auditor Deloitte instruction to investigate the allegations.

Jooste said in October 2017, he asked again that Deloitte look into the allegations - according to him, Deloitte answered that the allegations were nothing new.

He said legal representatives from Deloitte later told him that between September 2015 and November 2017, the audit firm investigated 15,000 documents. "No proof could be found [for irregular accounting practices],” Jooste says.

But near the end of November 2017, Deloitte changed its tune and asked that the release of Steinhoff results, which were scheduled to be released on December 6, be postponed.

Jooste then told Deloitte it was an “attempt by Seifert” to “influence litigation with Steinhoff”. He believed withholding the results would diminish investor confidence, which would result in fall in the share price. 

“My advice was to appoint new auditors and get accounts out by end January,” Jooste said. Failing to report full-year results - which was what happened - would have a “disastrous impact,” he said. The board disagreed and didn't release the results. PwC was appointed to probe the accounts.

Jooste said resigned when the board didn’t accept his proposal to release Steinhoff’s unaudited results.

In December, Steinhoff then said it uncovered accounting irregularities. 

“To me, accounting irregularities means fraud,” Jooste said. “I was not aware of any accounting irregularities.”

Jooste's R3 billion loss

Jooste said he personally lost R3 billion when Steinhoff shares plunged in December.

Replying to a question of EFF MP Floyd Shivambu, Jooste said he had 68 million Steinhoff shares held in a family trust.

Shivambu, however, insisted that Jooste give a monetary value to the amount of money he lost.


“I personally lost R3 billion on the day of the stock crash,” Jooste bluntly replied. 

Jooste is one of millions of Steinhoff shareholders - including the Public Investment Corporation which invested the pensions of South Africa’s 1.6 million civil servants - who lost money when the share price dropped by 96%.

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