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These are the user uploaded subtitles that are being translated: 1 00:00:05,519 --> 00:00:09,399 We find that people steal for, really, four reasons. 2 00:00:09,880 --> 00:00:11,920 The first is because they have to. 3 00:00:12,679 --> 00:00:15,758 The second is that you've found a way. 4 00:00:15,759 --> 00:00:18,678 The third, and this is where it starts to escalate, 5 00:00:18,679 --> 00:00:21,439 is that you are getting away with it. 6 00:00:21,440 --> 00:00:26,040 And the fourth is that if you are caught, the punishment... 7 00:00:26,679 --> 00:00:29,319 is acceptable to you. 8 00:00:30,239 --> 00:00:32,438 [reporter] shockwaves in corporate South Africa. 9 00:00:32,439 --> 00:00:34,478 [reporter] There were accounting irregularities... 10 00:00:34,479 --> 00:00:36,398 [reporter] ...accounting irregularities... 11 00:00:36,399 --> 00:00:37,399 Insider trading... 12 00:00:37,400 --> 00:00:39,679 [reporter] ...and possible tax fraud. 13 00:00:40,600 --> 00:00:43,639 The South Africa retail giant lost billions from its market value 14 00:00:43,640 --> 00:00:45,879 on the JSE and in Frankfurt. 15 00:00:45,880 --> 00:00:50,639 [reporter] Dark days lie ahead for Steinhoff and its CEO, Markus Jooste. 16 00:00:50,640 --> 00:00:52,640 [reporter] Investors want answers. 17 00:00:53,240 --> 00:00:56,800 [reporter] Jooste will also most likely face criminal charges. 18 00:00:56,801 --> 00:01:00,358 [Markus Jooste] I never lied about the activities of the company 19 00:01:00,359 --> 00:01:04,639 as the allegation was made. Obviously they're pointing fingers at me. 20 00:01:16,879 --> 00:01:18,119 [cellphone vibrating] 21 00:01:19,840 --> 00:01:21,120 [message alert] 22 00:01:34,239 --> 00:01:39,598 So it emerged that a few weeks before that moment in December 2017 23 00:01:39,599 --> 00:01:43,559 Markus Jooste had sent a message to four of his closest friends saying that 24 00:01:43,560 --> 00:01:46,320 what you need to do is probably sell your shares right now. 25 00:01:46,321 --> 00:01:47,639 [message alert] 26 00:01:52,040 --> 00:01:54,160 That falls within the classic definition of insider trading. 27 00:01:54,161 --> 00:01:57,999 You know that something damaging is coming down the line. 28 00:01:58,000 --> 00:01:59,600 You know this if you're Markus Jooste 29 00:01:59,601 --> 00:02:01,679 because you are the cause of what's happening. 30 00:02:06,439 --> 00:02:07,798 He warned his driver. 31 00:02:07,799 --> 00:02:11,758 He warned Ockie Oosthuizen and a few others to sell their shares. 32 00:02:11,759 --> 00:02:14,079 That's the easiest thing to prosecute him on. 33 00:02:14,080 --> 00:02:17,200 But it's a criminal thing. The Hawks could arrest him on that. 34 00:02:18,439 --> 00:02:22,438 This is a week before it collapsed, because he knew this was gonna collapse. 35 00:02:22,439 --> 00:02:24,239 That's the crazy part of it. 36 00:02:37,240 --> 00:02:40,040 [reporter1] It was like a storm tearing through the JSE. 37 00:02:40,520 --> 00:02:45,240 The international retailers announced that its CEO, Markus Jooste, has resigned. 38 00:02:46,520 --> 00:02:49,880 The news caused the company's share price to crash over 60%. 39 00:02:52,280 --> 00:02:56,079 The immediate reaction in Stellenbosch was much more acute. 40 00:02:56,080 --> 00:02:59,279 Or, the shocked reaction, I suppose, was much more acute 41 00:02:59,280 --> 00:03:00,880 than in the rest of the country. 42 00:03:03,479 --> 00:03:08,399 Because by that stage, Steinhoff had already infiltrated this town 43 00:03:08,400 --> 00:03:12,160 to such a degree that their logo pretty much was everywhere. 44 00:03:12,161 --> 00:03:15,718 For years, their shareholders may have enjoyed fat dividends, 45 00:03:15,719 --> 00:03:18,959 but for Steinhoff, the chickens are coming home to roost. 46 00:03:18,960 --> 00:03:23,360 Already people are talking about Steinhoff as Africa's Enron. 47 00:03:23,879 --> 00:03:29,279 [Pieter du Toit] A town which prides itself on being a town for the elite 48 00:03:29,280 --> 00:03:30,640 very quickly saw, 49 00:03:30,641 --> 00:03:34,239 "We need to create distance between ourselves, Jooste, and Steinhoff." 50 00:03:34,919 --> 00:03:37,438 All the hoardings and the advertising boards 51 00:03:37,439 --> 00:03:42,479 was very swiftly removed and relegated to a storage facility. 52 00:03:45,520 --> 00:03:48,519 So, Stellenbosch saw it's not temporary. 53 00:03:48,520 --> 00:03:51,040 This is done and dusted. This is permanent. 54 00:03:51,041 --> 00:03:52,679 [Fifi Peters] Just a week ago, 55 00:03:52,680 --> 00:03:57,598 Steinhoff was challenging world furniture giant IKEA for dominance. 56 00:03:57,599 --> 00:04:00,119 Now it has all gone to dust. 57 00:04:00,719 --> 00:04:04,319 But for the old money, there was a certain degree of schadenfreude. 58 00:04:04,800 --> 00:04:08,640 Even though a lot of them owned Steinhoff shares, and even though a lot of them 59 00:04:08,641 --> 00:04:13,119 enjoyed the hospitality of Markus Jooste quite often, you know. 60 00:04:13,800 --> 00:04:16,878 I think there was some duplicity around 61 00:04:16,879 --> 00:04:19,438 some of these old Stellenbosch moneyed classes, 62 00:04:19,439 --> 00:04:21,959 people saying, [clicks tongue] "I told you so." 63 00:04:25,600 --> 00:04:30,440 I've lost 30 years of my work. 64 00:04:31,120 --> 00:04:32,320 Will you sue him? 65 00:04:33,199 --> 00:04:36,279 Well, you know, that's part of the dicey things. 66 00:04:36,759 --> 00:04:40,599 I wait until the facts are on the table, 67 00:04:41,439 --> 00:04:47,239 and then all the actions will be taken that are necessary. 68 00:04:47,240 --> 00:04:50,600 - Thank you very much, sir. All the best. - My pleasure. Go well, bye-bye. 69 00:04:52,199 --> 00:04:55,119 [Fifi Peters] It's been a very expensive week for Wiese. 70 00:04:55,120 --> 00:04:58,398 He lost $2.1 billion in one day. 71 00:04:58,399 --> 00:05:02,599 His net worth has gone down from nearly $6 billion to less than a billion. 72 00:05:05,639 --> 00:05:10,359 He can't feel too good about having lost R59 billion 73 00:05:10,360 --> 00:05:13,200 less whatever he's recovered in recent settlements. 74 00:05:20,480 --> 00:05:25,320 Most of what was raised in 2009 actually materialized. 75 00:05:26,199 --> 00:05:28,239 [director] How did you feel personally at the time? 76 00:05:28,839 --> 00:05:31,878 I guess at the end of the day I felt vindicated. 77 00:05:31,879 --> 00:05:34,559 It's about the right result at the end of the day. 78 00:05:34,560 --> 00:05:38,398 And the right result was that Markus Jooste stepped down 79 00:05:38,399 --> 00:05:42,479 as CEO of Steinhoff for things that he shouldn't have been doing. 80 00:05:44,240 --> 00:05:49,119 It's in my blood, doing the right thing, and I strive to do that. 81 00:05:49,120 --> 00:05:54,758 I don't always achieve what I should and we all make mistakes along the way. 82 00:05:54,759 --> 00:05:58,599 But ultimately, doing the right thing is what it's all about. 83 00:06:02,360 --> 00:06:05,719 [Jean Pierre Verster] So on one hand, one feels good, if you do analysis 84 00:06:05,720 --> 00:06:08,800 and your analysis pans out and it shows that you were correct. 85 00:06:10,560 --> 00:06:14,400 On the other side, I knew that a lot of people would lose a lot of money, 86 00:06:14,401 --> 00:06:17,958 so there's no joy when the share price falls that sharply. 87 00:06:17,959 --> 00:06:20,359 I was relieved that I could at least protect 88 00:06:20,360 --> 00:06:22,838 the value of the investors in my fund 89 00:06:22,839 --> 00:06:26,159 and make some money from the fall in the share price. 90 00:06:27,120 --> 00:06:29,799 [director] How much money did you make on short selling Steinhoff? 91 00:06:29,800 --> 00:06:31,960 [Jean Pierre Verster] We made roughly R9 million. 92 00:06:31,961 --> 00:06:34,838 But there was definitely gonna be more pain 93 00:06:34,839 --> 00:06:38,839 versus those that made money from the incident, and I was aware of that. 94 00:06:43,160 --> 00:06:46,760 To this day we don't really know what transpired... 95 00:06:48,680 --> 00:06:52,398 other than the fact that we were told the share price, 96 00:06:52,399 --> 00:06:55,999 as supported by various professional bodies 97 00:06:56,000 --> 00:06:57,838 was fairly priced. 98 00:06:57,839 --> 00:07:01,958 If we knew that there would be an event in the future of the business 99 00:07:01,959 --> 00:07:06,239 that would drop that share price from R75 to R5, 100 00:07:06,240 --> 00:07:08,359 we would obviously never have done that deal. 101 00:07:08,360 --> 00:07:10,559 I hope no one would have done a deal. 102 00:07:10,560 --> 00:07:15,359 [director] You did your deal based on a share price that was a house of cards. 103 00:07:15,360 --> 00:07:18,559 So they say, and that's how it stands today. 104 00:07:18,560 --> 00:07:23,720 I think what was particularly aggrieving to us is that we weren't paid at all. 105 00:07:26,439 --> 00:07:28,359 Bernard Mostert joins us now. 106 00:07:28,360 --> 00:07:30,280 There's four years of litigation. 107 00:07:30,281 --> 00:07:36,318 It's a case of trying to find your way through the legal Gordian Knot. 108 00:07:36,319 --> 00:07:39,799 One of the reasons why we have litigated so aggressively 109 00:07:39,800 --> 00:07:43,198 is that there must be accountability 110 00:07:43,199 --> 00:07:45,559 and there must be recourse for events of this nature. 111 00:07:46,240 --> 00:07:48,039 [Braam van Huyssteen] It wasn't only about me. 112 00:07:48,040 --> 00:07:51,720 I had a team, and that's what concerned me most. 113 00:07:52,199 --> 00:07:55,958 [Landezwa Dulaze] Braam is the main shareholder who established the business, 114 00:07:55,959 --> 00:07:58,398 but we all contributed to the business. 115 00:07:58,399 --> 00:08:02,479 So we felt, as staff, that we were also defrauded. 116 00:08:02,480 --> 00:08:06,040 I believe there's been crime that has been committed here. 117 00:08:06,839 --> 00:08:11,079 We're not the kind of a team that sits there and wait for something to happen. 118 00:08:12,160 --> 00:08:15,559 [Bernard Mostert] We have people in the business who've been with us a long time. 119 00:08:15,560 --> 00:08:19,799 And for them to hear, A, "What you were promised you're not gonna get," 120 00:08:19,800 --> 00:08:25,400 and, B, "Your mentor and your founder has been defrauded." 121 00:08:28,360 --> 00:08:30,638 Very, very difficult to stomach. 122 00:08:30,639 --> 00:08:35,079 We did have the resources to go full steam ahead 123 00:08:35,080 --> 00:08:39,640 once we knew that what was promised to us wasn't what it was. 124 00:08:45,679 --> 00:08:47,599 [Rob Rose] There were smaller guys, various investors, 125 00:08:47,600 --> 00:08:51,319 that swapped a stake in a fast-growing company with good prospects 126 00:08:51,320 --> 00:08:54,040 for something that ultimately turned out to be a mirage. 127 00:08:54,041 --> 00:08:57,079 So, a lot of the guys who had shares in this growing company 128 00:08:57,080 --> 00:08:59,280 were then left with something pretty worthless. 129 00:08:59,281 --> 00:09:05,558 In total I lost quite a few million from Steinhoff, which is really a lot of money. 130 00:09:05,559 --> 00:09:11,558 Hard-earned money that my wife and I worked for in our various businesses 131 00:09:11,559 --> 00:09:14,959 throughout the 50 years of being an entrepreneur. 132 00:09:20,399 --> 00:09:24,518 When things go wrong, it's human nature to play the blame game. 133 00:09:24,519 --> 00:09:26,959 Steinhoff's case is no different. 134 00:09:26,960 --> 00:09:28,439 Questions have been asked about 135 00:09:28,440 --> 00:09:33,319 how billionaire Christo Wiese, and the entire Steinhoff board, 136 00:09:33,320 --> 00:09:35,359 did not know what was going on. 137 00:09:35,360 --> 00:09:38,319 These are the kind of people who we, as the public, 138 00:09:38,320 --> 00:09:41,239 believe know what they're doing when they're managing our money. 139 00:09:41,240 --> 00:09:44,439 It's not only Christo Wiese and the board and the auditors. 140 00:09:44,440 --> 00:09:47,239 It's analysts, investors, asset managers, 141 00:09:47,240 --> 00:09:50,999 the PIC, who was the second biggest shareholder in Steinhoff 142 00:09:51,000 --> 00:09:52,120 for a number of years. 143 00:09:52,759 --> 00:09:57,278 The PIC is then actually the main investment agency 144 00:09:57,279 --> 00:10:00,999 for the government employment fund. 145 00:10:05,360 --> 00:10:09,758 And all people working for the government, the state officials, 146 00:10:09,759 --> 00:10:13,719 and the pensioners are co-owners of that fund. 147 00:10:13,720 --> 00:10:18,200 Steinhoff was one of the big organizations in which 148 00:10:18,679 --> 00:10:23,278 the PIC invested in order to grow the fund 149 00:10:23,279 --> 00:10:27,839 to make sure that the benefits could be paid to pensioners. 150 00:10:34,600 --> 00:10:36,479 The Federation would like to assure 151 00:10:36,480 --> 00:10:41,119 government employee pension fund members and pensioners 152 00:10:41,120 --> 00:10:44,119 that their funds are fully protected based on the fact 153 00:10:44,120 --> 00:10:48,038 in the beginning, the benefits are set out in law. 154 00:10:48,039 --> 00:10:52,878 Market fluctuations do not affect the quantum of the pension benefits. 155 00:10:52,879 --> 00:10:55,959 We essentially have two types of pension funds. 156 00:10:55,960 --> 00:10:59,800 There is a pension fund where you put in your money and you hope for the best. 157 00:10:59,801 --> 00:11:03,599 We refer to that as a defined contribution fund because you are only told 158 00:11:03,600 --> 00:11:06,199 how much you need to put in, which is your contribution. 159 00:11:06,200 --> 00:11:09,599 We are hoping that over the life of your employment then, 160 00:11:09,600 --> 00:11:13,400 though the pension fund contributions are invested in a manner 161 00:11:13,401 --> 00:11:14,999 that leaves you better off. 162 00:11:15,000 --> 00:11:18,999 On the other hand, we then have something referred to as a defined benefit fund, 163 00:11:19,000 --> 00:11:22,520 which is one that simply says that if you work for so many years 164 00:11:22,521 --> 00:11:26,479 and your salary is XYZ, when you eventually retire on a particular date, 165 00:11:26,480 --> 00:11:28,320 this is how much you're going to get. 166 00:11:28,960 --> 00:11:34,000 So the government employee pension fund is a defined benefit model. 167 00:11:35,600 --> 00:11:37,400 Under a defined benefit scheme, 168 00:11:37,401 --> 00:11:40,758 the biggest risk that you face is that at the point in time 169 00:11:40,759 --> 00:11:43,119 when your employees have to retire, 170 00:11:43,120 --> 00:11:44,599 the money that's available 171 00:11:44,600 --> 00:11:47,920 may not be sufficient to meet the commitments that you've made. 172 00:11:47,921 --> 00:11:51,999 Then, obviously, somebody has to step in and top up whatever that deficit might be, 173 00:11:52,000 --> 00:11:54,680 and in this case, it happens to be the South African taxpayer. 174 00:11:57,559 --> 00:12:02,119 The long-term effect is the big problem. It's going to be a complete disaster. 175 00:12:04,600 --> 00:12:06,920 [Zwelakhe Mnguni] There are smaller pension funds that were invested. 176 00:12:06,921 --> 00:12:10,599 Even my pension fund, wherever it is, it would have been affected. 177 00:12:16,279 --> 00:12:20,319 And if you think about widows and orphans and security guards, 178 00:12:20,320 --> 00:12:25,359 and, you know, I'm an ex-security guard and actually those people, 179 00:12:25,360 --> 00:12:28,398 they've got no means, even if it was R5 000... 180 00:12:28,399 --> 00:12:30,758 They've got no means of recovering that R5 000. 181 00:12:30,759 --> 00:12:36,038 It may be tiny amounts in absolute terms, but relative to what those people own, 182 00:12:36,039 --> 00:12:37,558 it's significant. 183 00:12:37,559 --> 00:12:41,878 There is a bit of an emotional connection to me that I know how it feels 184 00:12:41,879 --> 00:12:47,319 and I know how difficult it is for them every day to try and make their day wage. 185 00:12:49,840 --> 00:12:55,959 I worked for six years as a security guard and I saved up for university, 186 00:12:55,960 --> 00:12:59,959 and I knew that I had a passion for financial markets. 187 00:12:59,960 --> 00:13:01,960 And yeah, that's where I come from. 188 00:13:05,600 --> 00:13:09,878 There were defenceless people who are sweeping the streets, 189 00:13:09,879 --> 00:13:14,119 working for the municipality, and now they're caught up in the Steinhoff thing. 190 00:13:14,120 --> 00:13:16,560 And it was particularly for that reason 191 00:13:16,561 --> 00:13:19,119 that I stood up and said, "I'm going to the police 192 00:13:19,120 --> 00:13:24,678 and I must give the police the evidence that I, together with the team, 193 00:13:24,679 --> 00:13:28,079 we have been saying there is something wrong here." 194 00:13:28,919 --> 00:13:32,439 So I felt that by going to the police 195 00:13:32,440 --> 00:13:35,918 it would actually give us some retribution 196 00:13:35,919 --> 00:13:38,639 for the investors, for South Africa. 197 00:13:42,799 --> 00:13:45,678 [Rob Rose] What happened at Steinhoff, did it hit you financially? 198 00:13:45,679 --> 00:13:50,079 It was very bad. Everything is gone. The big money is gone. 199 00:13:53,559 --> 00:13:57,239 So that was an absolute uncomfortable for me 200 00:13:57,240 --> 00:14:00,758 and for my family, to tell to my family what is there. 201 00:14:00,759 --> 00:14:05,119 For me Steinhoff is finished, I have nothing to do with that. 202 00:14:07,440 --> 00:14:12,798 You see, with my business I was never home 203 00:14:12,799 --> 00:14:15,439 to develop this company in the whole world. 204 00:14:16,679 --> 00:14:21,439 I think that is the truth. But now that time is over. Now I have time enough. 205 00:14:21,960 --> 00:14:26,719 And I'm a happy man with 85 years to survive. 206 00:14:26,720 --> 00:14:28,319 And I want to have sport. 207 00:14:28,320 --> 00:14:31,800 I want to have friendship or to stay with people together. 208 00:14:31,801 --> 00:14:34,159 That is the end of my life. 209 00:14:35,279 --> 00:14:38,359 Markus... I don't know what he's doing. 210 00:14:38,360 --> 00:14:43,798 I only know that in South Africa, all the big MDs in these companies, 211 00:14:43,799 --> 00:14:46,479 these people have no contact with Markus. 212 00:14:49,960 --> 00:14:54,560 After December 2017, when Markus resigns, he retreats to Hermanus. 213 00:14:57,000 --> 00:14:58,359 In the months after the crash, 214 00:14:58,360 --> 00:15:01,360 Steinhoff was scrambling hard to figure out how to survive. 215 00:15:02,000 --> 00:15:05,439 For a few days, Christo Wiese took the reins as acting CEO 216 00:15:05,440 --> 00:15:07,959 but soon resigned entirely from the board when it became clear 217 00:15:07,960 --> 00:15:10,920 that he was going to sue the company for what he lost. 218 00:15:10,921 --> 00:15:14,239 Heather Sonn is then appointed as chair of Steinhoff 219 00:15:14,240 --> 00:15:17,120 to, I suppose, clean the thing up. 220 00:15:18,960 --> 00:15:23,079 She had a formidable track record working in New York and various other places, 221 00:15:23,080 --> 00:15:25,800 and as an investment banker she knew her way around finance. 222 00:15:25,801 --> 00:15:30,199 So after they appointed the new board, Christo Weise, Heather Sonn, 223 00:15:30,200 --> 00:15:33,760 and a few others go to Parliament to explain what has happened at Steinhoff. 224 00:15:42,320 --> 00:15:45,599 On the first day that I was asked to take this position, 225 00:15:45,600 --> 00:15:52,199 I asked for a picture of the person who lost the most, the biggest loser. 226 00:15:52,200 --> 00:15:57,158 We couldn't find a picture, but that is the picture that I keep in my mind. 227 00:15:57,159 --> 00:16:03,878 And as long as there is hope that we can get to some return for that individual, 228 00:16:03,879 --> 00:16:08,119 those sets of individuals, we will not stop trying. 229 00:16:08,120 --> 00:16:13,199 People and households lost money. My own father lost money, 230 00:16:13,200 --> 00:16:15,079 a significant amount of money. 231 00:16:15,080 --> 00:16:20,440 And so it was very clear that there were going to be significant consequences. 232 00:16:22,480 --> 00:16:24,119 I thought very strongly at the time 233 00:16:24,120 --> 00:16:28,319 Parliament has to be, sort of, tough on crime in the public sector, 234 00:16:28,320 --> 00:16:32,638 but also tough on crime in the private sector, 235 00:16:32,639 --> 00:16:39,359 and needed to start to scrutinize what indeed had happened. 236 00:16:39,360 --> 00:16:42,798 Your version, essentially, was that Markus Jooste 237 00:16:42,799 --> 00:16:47,278 perpetrated a massive fraud all on his own, 238 00:16:47,279 --> 00:16:50,398 and nobody knew anything about it, 239 00:16:50,399 --> 00:16:53,638 least of all the non-executive directors. 240 00:16:53,639 --> 00:16:58,719 It's a lot of, can I put it gently? Waffle. Really, it's disappointing. 241 00:16:59,679 --> 00:17:02,479 It's bordering on demoralizing, actually. 242 00:17:02,480 --> 00:17:05,919 And we feel that you're not fully appreciating 243 00:17:05,920 --> 00:17:08,159 the gravity of what's at issue here. 244 00:17:08,160 --> 00:17:11,320 [Louis du Preez] Heather and I were the punching bags. 245 00:17:11,321 --> 00:17:14,399 We were the ones that were shouted and screamed at 246 00:17:14,400 --> 00:17:17,000 because we were the face of the company. 247 00:17:22,839 --> 00:17:25,558 It got quite personal at times, 248 00:17:25,559 --> 00:17:30,278 and people taking out their frustration on you personally. 249 00:17:30,279 --> 00:17:35,038 It's stuff that got said in affidavits and in court. 250 00:17:35,039 --> 00:17:37,879 Now, we all know that's part of the game, 251 00:17:37,880 --> 00:17:43,200 but it's, um... It's hard, personally, and it's quite hard on the family. 252 00:17:45,079 --> 00:17:48,399 The immediate task was just to try and stabilize everything. 253 00:17:48,400 --> 00:17:53,838 And no shareholder is going to be prepared to keep their shares 254 00:17:53,839 --> 00:17:57,879 in your company without financials. 255 00:17:57,880 --> 00:18:04,278 And here embarks the process to try and get new financials in place. 256 00:18:04,279 --> 00:18:06,719 That was part of the reason 257 00:18:06,720 --> 00:18:11,600 why we embarked with a PWC forensic investigation. 258 00:18:12,640 --> 00:18:17,758 I and the management team have weekly contact with PWC. 259 00:18:17,759 --> 00:18:21,439 In fact, I've got two calls a week, set up with them. 260 00:18:21,440 --> 00:18:26,239 At the current moment, there's more than a hundred people of PWC 261 00:18:26,240 --> 00:18:28,679 that works on this assignment across the world. 262 00:18:28,680 --> 00:18:33,999 The costs for this company in employing PWC is significant. 263 00:18:34,000 --> 00:18:37,000 At the moment it runs north of R200 million. 264 00:18:38,039 --> 00:18:41,919 We had the unfortunate position that Mr Jooste 265 00:18:41,920 --> 00:18:45,879 wasn't around at the time because he resigned. 266 00:18:45,880 --> 00:18:49,199 Did Markus Jooste, in your view, ever lie to you, 267 00:18:49,200 --> 00:18:52,558 mislead you, or do you think, use you? 268 00:18:52,559 --> 00:18:56,159 I do believe that there was a limited sharing of information 269 00:18:56,160 --> 00:18:58,199 from Mr Jooste to myself. 270 00:18:58,200 --> 00:19:01,040 You must bear in mind that, at least in my view, 271 00:19:01,041 --> 00:19:04,759 this practice commenced a number of years ago. 272 00:19:05,480 --> 00:19:09,120 So therefore, if you grow that false profit every year, no person, 273 00:19:09,121 --> 00:19:13,078 no auditor, no analyst will certainly just by looking at the numbers, tell you, 274 00:19:13,079 --> 00:19:16,959 "But here's something that changes suddenly this year, here's false income!" 275 00:19:16,960 --> 00:19:20,880 Because it started so long ago and just every year it gets increased a little bit. 276 00:19:21,319 --> 00:19:23,439 From my side, I'm also deeply saddened 277 00:19:23,440 --> 00:19:27,320 with the events that happened at Steinhoff and all the money that was lost, 278 00:19:27,321 --> 00:19:31,239 like the majority of people involved in trying to save this business. 279 00:19:31,880 --> 00:19:35,959 From my side, I also do not think I did anything deliberately wrong. 280 00:19:35,960 --> 00:19:38,120 [Rob Rose] Ben la Grange, Steinhoff's former CFO, 281 00:19:38,121 --> 00:19:40,879 was left in the lurch when Jooste quit and disappeared. 282 00:19:42,039 --> 00:19:43,719 He was left to flounder in Parliament, 283 00:19:43,720 --> 00:19:46,760 faced a series of questions to which he just didn't have answers. 284 00:19:47,720 --> 00:19:49,600 Ben was one of Markus's most loyal lieutenants, 285 00:19:49,601 --> 00:19:52,599 but when the going got tough, Jooste left him in the cold. 286 00:19:53,759 --> 00:19:58,078 PWC released the report just after the close of the markets last Friday, 287 00:19:58,079 --> 00:20:01,838 16 months after Markus Jooste walked out of the building. 288 00:20:01,839 --> 00:20:04,479 [reporter2] A report by auditing firm PWC 289 00:20:04,480 --> 00:20:08,239 named several executives, including former CEO, Markus Jooste. 290 00:20:08,240 --> 00:20:10,679 No one really knows where Jooste is. 291 00:20:10,680 --> 00:20:13,320 He still hasn't come forward or spoken to anyone. 292 00:20:13,321 --> 00:20:15,879 Mr Jooste, we understand, is still in the country, 293 00:20:15,880 --> 00:20:19,118 either in Stellenbosch or at his home in Hermanus. 294 00:20:19,119 --> 00:20:21,679 But having said that, there's been no charges put to him, 295 00:20:21,680 --> 00:20:24,520 so he really is free to come and go as he pleases. 296 00:20:30,960 --> 00:20:33,600 Just like a romantic relationship when it ends, 297 00:20:33,601 --> 00:20:37,078 when you look back you kind of see the warning signs. 298 00:20:37,079 --> 00:20:42,278 Having that reflection on your professional relationship with Jooste, 299 00:20:42,279 --> 00:20:43,919 do you have those warning signs? 300 00:20:44,400 --> 00:20:48,399 No. Nothing, you know, that would stick out, 301 00:20:48,400 --> 00:20:52,360 that would certainly make you say, "Whoops, let's look at this again." 302 00:20:54,880 --> 00:21:00,199 In this instance, it was literally a bolt out of the blue. 303 00:21:00,200 --> 00:21:04,199 I always found it strange that he said it came like a bolt out of the blue. 304 00:21:04,200 --> 00:21:07,560 Could be a case of being blind to what's actually going on, because 305 00:21:07,561 --> 00:21:10,919 if you get too close to the management team, you sort of lose your objectivity. 306 00:21:10,920 --> 00:21:14,879 So, I wouldn't be surprised if Christo Wiese lost his objectivity 307 00:21:14,880 --> 00:21:19,480 in terms of seeing, actually, that he was gonna be taken for a ride. 308 00:21:20,119 --> 00:21:22,879 [Rob Rose] You know, your career has been a series of successes. 309 00:21:22,880 --> 00:21:25,080 - You haven't had too many failures. - Yes. 310 00:21:25,081 --> 00:21:27,999 How does the Steinhoff failure rank in your business career? 311 00:21:28,000 --> 00:21:30,159 I mean, was it your biggest mistake? 312 00:21:30,160 --> 00:21:33,239 It is the biggest mistake by a country mile, Rob. 313 00:21:33,240 --> 00:21:36,440 I mean, what it cost me in monetary terms. 314 00:21:40,480 --> 00:21:44,078 But what it cost also in reputational terms, 315 00:21:44,079 --> 00:21:47,318 it's by a country mile the biggest mistake. 316 00:21:47,319 --> 00:21:52,439 How would I explain getting lured into that trap? 317 00:21:52,440 --> 00:21:57,838 Is I relied too much on other people's due diligence. 318 00:21:57,839 --> 00:22:02,639 Jooste, for a period of more than a decade, we now know, 319 00:22:02,640 --> 00:22:07,680 had managed to get through the internal audit function in Steinhoff. 320 00:22:08,160 --> 00:22:11,199 He managed to get through the component auditors 321 00:22:11,200 --> 00:22:13,760 in the different jurisdictions all over the world. 322 00:22:13,761 --> 00:22:17,679 He got through the banks that lent him billions. 323 00:22:18,359 --> 00:22:22,639 The institutional investors, the ratings agencies. 324 00:22:22,640 --> 00:22:25,600 You know, until a few months before the collapse, 325 00:22:25,601 --> 00:22:28,879 Steinhoff still had an investment-grade rating. 326 00:22:30,079 --> 00:22:33,439 He got through all those gatekeepers. 327 00:22:34,640 --> 00:22:36,838 Why should I have seen it? 328 00:22:36,839 --> 00:22:42,239 When those people who were there for years, they never saw it. 329 00:22:42,240 --> 00:22:47,919 Should I have said, "No, no, no. I don't trust all these auditors. 330 00:22:47,920 --> 00:22:50,320 I want to do my own audit"? 331 00:22:53,680 --> 00:22:58,200 Why did it never happen in 50 years in my other businesses? 332 00:23:03,400 --> 00:23:07,118 There was a long history of the Steinhoff management team 333 00:23:07,119 --> 00:23:11,679 getting more and more aggressive, whether in applying accounting policies, 334 00:23:12,240 --> 00:23:18,639 whether in doing tax structuring, whether in doing merger and acquisition deals. 335 00:23:18,640 --> 00:23:21,800 But at some point, it doesn't pass the smell test. 336 00:23:27,079 --> 00:23:32,239 No company wants to have liabilities that negatively affect its bottom line, 337 00:23:32,240 --> 00:23:35,040 and so it will look for ways of removing them. 338 00:23:35,041 --> 00:23:39,518 They're called off balance sheet transactions, an accounting loophole 339 00:23:39,519 --> 00:23:44,319 that can be used to enhance the company's apparent profitability. 340 00:23:44,799 --> 00:23:46,278 In the case of Steinhoff, 341 00:23:46,279 --> 00:23:50,759 it had consumer finance businesses JD Finance and Capfin. 342 00:23:51,480 --> 00:23:55,800 These companies extended loans to people who often couldn't afford them, 343 00:23:55,801 --> 00:23:58,519 and so, the risk of defaulting was high. 344 00:23:59,319 --> 00:24:05,038 Steinhoff decided to sell these companies to a third party to remove this risk. 345 00:24:05,039 --> 00:24:10,639 However, it actually lent the money to the third party to finance this purchase 346 00:24:10,640 --> 00:24:15,639 and accounted for the interest on these loans as revenue. 347 00:24:15,640 --> 00:24:21,278 Steinhoff then reacquired the profitable segments of the businesses. 348 00:24:21,279 --> 00:24:23,919 It was a deal that didn't stand up to scrutiny 349 00:24:23,920 --> 00:24:27,400 as it was clearly set up to exploit a loophole. 350 00:24:29,480 --> 00:24:33,639 At face value, it makes sense to say no one would enter into a transaction 351 00:24:33,640 --> 00:24:35,959 that they knew, behind the scenes, 352 00:24:35,960 --> 00:24:39,239 was with a company that had no substance, that was fraudulent. 353 00:24:39,240 --> 00:24:43,078 I do think, though, that people sometimes enter transactions 354 00:24:43,079 --> 00:24:45,318 that they know is quite aggressive. 355 00:24:45,319 --> 00:24:48,719 It pushes the envelope when it comes to tax rules, 356 00:24:48,720 --> 00:24:51,479 comes to foreign exchange restrictions, 357 00:24:51,480 --> 00:24:54,600 and therefore that they should know that there's a risk, 358 00:24:54,601 --> 00:24:58,239 perhaps that some of the deals are very close to the foul line. 359 00:25:00,680 --> 00:25:04,560 I never could believe that these figures were coloured. Never. 360 00:25:05,039 --> 00:25:10,399 Our business style was to have top people and to believe top people. 361 00:25:10,400 --> 00:25:16,038 I never was in these meetings because the finance department was not my job. 362 00:25:16,039 --> 00:25:20,239 And they always said everything is okay. I had a shock, a real shock. 363 00:25:31,680 --> 00:25:36,038 [Louis du Preez] You have to understand why they're so upset, 364 00:25:36,039 --> 00:25:37,999 why they're so frustrated. 365 00:25:38,000 --> 00:25:40,719 And it's not just the money that they've lost. 366 00:25:40,720 --> 00:25:45,758 There's that personal self-belief that they've lost, 367 00:25:45,759 --> 00:25:50,518 "But how could I not have seen this? How did I miss this? 368 00:25:50,519 --> 00:25:54,199 Is there something wrong in my judgment?" 369 00:25:54,200 --> 00:25:57,719 [Fifi Peters] In all the confusion, one of the big questions coming out 370 00:25:57,720 --> 00:26:02,118 is how on earth the auditors signed off on Steinhoff results 371 00:26:02,119 --> 00:26:04,999 for many years, before everything came to light? 372 00:26:06,160 --> 00:26:11,160 Steinhoff's results were very difficult to compare with previous years' results. 373 00:26:14,880 --> 00:26:18,520 Steinhoff changed its year end during the preceding years, 374 00:26:18,521 --> 00:26:22,999 so what it meant was you couldn't really compare the one year with the other one. 375 00:26:23,000 --> 00:26:27,558 And they also changed the reporting currency from Rand to Euro. 376 00:26:27,559 --> 00:26:29,118 Which also made it very difficult 377 00:26:29,119 --> 00:26:32,558 because, you know, which exchange rate do you use to compare? 378 00:26:32,559 --> 00:26:36,999 Because the sales were made over a 12-month period. 379 00:26:37,640 --> 00:26:43,118 But at that stage it was definitely not perceived as being a way to hide, 380 00:26:43,119 --> 00:26:45,599 you know, accounting irregularities. 381 00:26:46,240 --> 00:26:51,080 Steinhoff is a big company, it's a complex company, it's got a lot of moving parts. 382 00:26:51,081 --> 00:26:53,519 Maybe it was just a way to simplify things, 383 00:26:54,279 --> 00:26:58,959 and I think that is how it was perceived by the media, as well as many analysts. 384 00:27:09,759 --> 00:27:12,999 Auditors perform a public service. They operate in the public interest. 385 00:27:13,000 --> 00:27:16,720 And often auditors forget that they are there to protect the public. 386 00:27:20,880 --> 00:27:24,439 They don't work for the directors of the company. 387 00:27:24,440 --> 00:27:27,798 In fact, they should report back to the investors 388 00:27:27,799 --> 00:27:32,318 that management is performing their functions properly. 389 00:27:32,319 --> 00:27:35,479 It's still the responsibility of the management 390 00:27:35,480 --> 00:27:37,239 to prepare the financial statements, 391 00:27:37,240 --> 00:27:40,318 and the responsibility of those with oversight 392 00:27:40,319 --> 00:27:41,999 to exercise their oversight function 393 00:27:42,000 --> 00:27:45,800 in terms of management's preparation of those financial statements. 394 00:27:45,801 --> 00:27:49,598 And an audit cannot take away those responsibilities. 395 00:27:49,599 --> 00:27:54,159 Now, we do know that auditors are also not responsible for detecting fraud, 396 00:27:54,160 --> 00:27:57,439 but the standards require that the auditors 397 00:27:57,440 --> 00:28:01,480 do develop procedures to discover fraud if it does exist. 398 00:28:02,039 --> 00:28:06,598 There was a lot of information in the public domain that would've alerted me 399 00:28:06,599 --> 00:28:08,598 to ask more questions, 400 00:28:08,599 --> 00:28:14,559 to be sceptical about some of the alleged shenanigans at Steinhoff. 401 00:28:16,759 --> 00:28:18,479 The fraud standard actually 402 00:28:18,480 --> 00:28:22,558 starts off by explaining that there are two types of fraud. 403 00:28:22,559 --> 00:28:26,879 It's either misappropriation of assets or fraudulent financial reporting. 404 00:28:27,519 --> 00:28:31,759 In the case of Steinhoff, it was allegedly fraudulent financial reporting. 405 00:28:32,759 --> 00:28:36,278 If you'll indulge me, I'll go through some of the factors 406 00:28:36,279 --> 00:28:39,879 that could have alerted the auditors to... 407 00:28:41,240 --> 00:28:42,680 potential fraud existing. 408 00:28:45,160 --> 00:28:47,320 "Rapid growth in a business. 409 00:28:47,920 --> 00:28:51,240 The need for additional debt or additional financing. 410 00:28:52,440 --> 00:28:54,560 The inability to repay debt. 411 00:28:55,559 --> 00:28:59,159 Significant related-party transactions. 412 00:29:00,119 --> 00:29:02,679 When there's many year-end adjustments. 413 00:29:03,240 --> 00:29:07,479 Missing evidence, or altered documents. 414 00:29:07,480 --> 00:29:10,080 - Dominant management or a dominant CEO. - [seagull calling] 415 00:29:11,680 --> 00:29:17,080 Weak governance structures. Complex organisational structures. 416 00:29:17,680 --> 00:29:20,160 When there are schemes to reduce tax. 417 00:29:21,519 --> 00:29:24,358 Unreasonable timeframes placed on the auditor. 418 00:29:24,359 --> 00:29:26,919 When there is a lot of complex transactions 419 00:29:26,920 --> 00:29:29,199 when it involves international operations, 420 00:29:29,200 --> 00:29:33,480 and when there's use of intermediaries, when doing business." 421 00:29:36,519 --> 00:29:40,639 Deloitte needs to take responsibility for what happened. 422 00:29:40,640 --> 00:29:44,639 I think they were one of the key failures 423 00:29:44,640 --> 00:29:48,159 in the oversight function for Steinhoff. 424 00:29:48,160 --> 00:29:52,278 They screwed up, with any doubt, 425 00:29:52,279 --> 00:29:55,159 and it cost a lot of people a lot of money. 426 00:29:57,119 --> 00:30:00,959 One of the root causes that we also discovered was that 427 00:30:00,960 --> 00:30:06,999 the firms had started to allow their commercial interests 428 00:30:07,000 --> 00:30:10,840 to overtake their professional responsibilities. 429 00:30:11,680 --> 00:30:14,479 [director] In simple terms, we're talking about greed? 430 00:30:14,480 --> 00:30:15,680 Yes. 431 00:30:19,839 --> 00:30:25,679 It's quite clear that people can almost describe Steinhoff 432 00:30:25,680 --> 00:30:30,600 as a massive commercial, fraudulent conspiracy. 433 00:30:31,119 --> 00:30:36,959 Because the figures would indicate that, you know, there was very little 434 00:30:37,599 --> 00:30:42,359 in the Steinhoff that I sold my companies into... 435 00:30:43,319 --> 00:30:47,999 in contradiction of the published audited accounts. 436 00:30:52,519 --> 00:30:56,518 If someone is meticulous and devious in the way that they actually hide it, 437 00:30:56,519 --> 00:30:59,558 the one thing that's gonna be very difficult to protect yourself against 438 00:30:59,559 --> 00:31:02,279 is a deliberate fraudster and thief. 439 00:31:06,400 --> 00:31:09,840 I think that there's the old saying, "If good men stay quiet, 440 00:31:09,841 --> 00:31:11,679 that's when evil things happen." 441 00:31:11,680 --> 00:31:15,639 And I think that lots of the board members, the investors... 442 00:31:15,640 --> 00:31:17,999 In Afrikaans we call it, they are "skaamkwaad" 443 00:31:18,000 --> 00:31:21,999 they're cross with themselves, but they also don't want to admit it. 444 00:31:22,000 --> 00:31:26,400 I think it's important that we all put the facts on the table as we believe they are. 445 00:31:27,440 --> 00:31:32,278 I think one of the first building blocks of any good scam 446 00:31:32,279 --> 00:31:36,358 is to ensure that you surround yourself with a core of people 447 00:31:36,359 --> 00:31:40,759 who are going to be your lieutenants, and Markus did that very well. 448 00:31:45,119 --> 00:31:47,999 It's true, also, that in any business you must surround yourself 449 00:31:48,000 --> 00:31:52,919 with a core of lieutenants, and there's nothing wrong with that in principle. 450 00:31:52,920 --> 00:31:56,840 But I think as this thing grew... Because if you can get away with it once, 451 00:31:56,841 --> 00:32:00,919 you'll get away with it twice, and you continue to do it as long as you can. 452 00:32:00,920 --> 00:32:03,999 And so this thing snowballed. And as it snowballed, 453 00:32:04,000 --> 00:32:09,518 the strategy of Markus surrounding himself with a board and leaders 454 00:32:09,519 --> 00:32:15,798 who were going to accept that we needed to, almost, commit small crimes 455 00:32:15,799 --> 00:32:17,759 for the greater good, so to speak. 456 00:32:18,240 --> 00:32:20,600 I'm sure that's how they explained it to themselves. 457 00:32:20,601 --> 00:32:24,879 All of that points to an infrastructure 458 00:32:24,880 --> 00:32:28,078 of deceit and fraud, almost, if you will, 459 00:32:28,079 --> 00:32:33,038 because if that's what comes out, that it was fraud, then one can now say 460 00:32:33,039 --> 00:32:37,239 that that was how you built up this infrastructure to realize that. 461 00:32:37,240 --> 00:32:38,719 And the key to that 462 00:32:38,720 --> 00:32:43,120 was keeping those individuals who know how the system works, close. 463 00:32:46,200 --> 00:32:48,959 There was this cabal, in a sense. 464 00:32:48,960 --> 00:32:53,879 This closed, Mafia-style, Stellenbosch-type of grouping, 465 00:32:53,880 --> 00:32:55,999 all connected to each other, all studied together. 466 00:32:56,000 --> 00:32:59,919 It was in many ways not different to what apartheid was 467 00:32:59,920 --> 00:33:04,160 in the sense in that it's authoritarian. You know, you're either in or you're out. 468 00:33:07,440 --> 00:33:08,959 The fact that Steinhoff 469 00:33:08,960 --> 00:33:11,959 became one of the biggest supporters of rugby in the country. 470 00:33:11,960 --> 00:33:17,999 Another key thing, I mean, he would take rugby players from the Lions, or wherever, 471 00:33:18,000 --> 00:33:20,439 and he would bring them straight into the organization. 472 00:33:20,440 --> 00:33:24,199 You know, they would basically have a straight entry 473 00:33:24,200 --> 00:33:26,879 into an executive position, and I experienced that. 474 00:33:26,880 --> 00:33:29,879 After years of working, doing the hard graft, 475 00:33:29,880 --> 00:33:32,600 I suddenly had to report to some rugby player who came in 476 00:33:32,601 --> 00:33:34,439 and has no business experience. 477 00:33:36,119 --> 00:33:39,798 I realized that my time at Steinhoff had come to an end 478 00:33:39,799 --> 00:33:44,118 when Markus appointed one of his Stellenbosch buddies 479 00:33:44,119 --> 00:33:47,199 to head up the unit that I was working in. 480 00:33:47,599 --> 00:33:51,239 And, you know, we were supposed to be colleagues 481 00:33:51,240 --> 00:33:56,558 and it was clear that there was just no respect for me as a person. 482 00:33:56,559 --> 00:33:59,239 I addressed this issue with Markus in the room. 483 00:33:59,240 --> 00:34:03,439 And it wasn't well received. And after that, you can imagine 484 00:34:03,440 --> 00:34:07,080 doors started closing and things just looked completely different. 485 00:34:07,081 --> 00:34:09,959 I had a bit of a... 486 00:34:10,679 --> 00:34:14,759 What shall one call it? A Damascus moment, in a sense. 487 00:34:14,760 --> 00:34:18,320 Where I broke my ties with Steinhoff, sold my shares, and I moved on. 488 00:34:33,559 --> 00:34:36,439 When the initial fallout happened 489 00:34:36,440 --> 00:34:38,240 it was a little bit awkward 490 00:34:38,241 --> 00:34:40,799 for everyone to know, really, how to deal with it. 491 00:34:44,679 --> 00:34:47,678 In terms of the racing side of things, 492 00:34:47,679 --> 00:34:51,558 it seemed as though Mr Jooste was reluctant to withdraw, 493 00:34:51,559 --> 00:34:53,439 but to his credit, he did. 494 00:34:54,079 --> 00:34:58,078 So there was a bit, in my opinion, of an unseemly scramble 495 00:34:58,079 --> 00:35:00,839 for these horses to be reallocated. 496 00:35:00,840 --> 00:35:05,678 So they were sold or, you know, changed ownership sort of overnight 497 00:35:05,679 --> 00:35:09,039 so that they could still run, but it would be under somebody else's name. 498 00:35:09,960 --> 00:35:12,520 [director] Somebody who obviously has such a passion for this, 499 00:35:12,521 --> 00:35:15,718 - this must... - Hurt. 500 00:35:15,719 --> 00:35:18,879 I would imagine it's difficult because it's you know, it's not just your hobby. 501 00:35:18,880 --> 00:35:22,638 It becomes your social life. It becomes your business life. 502 00:35:22,639 --> 00:35:27,078 And so, to lose all of that, sort of overnight, must be pretty tough. 503 00:35:27,079 --> 00:35:30,279 So yeah, I imagine it would've been a pretty hard blow. 504 00:35:31,360 --> 00:35:35,319 [Alec Hogg] The industry did, certainly in the initial stages, take a terrible hit. 505 00:35:35,320 --> 00:35:39,200 A lot of that is that the firepower that Jooste brought to sales 506 00:35:39,201 --> 00:35:43,718 and the way that the money he invested in the industry lifted all ships. 507 00:35:43,719 --> 00:35:45,759 That firepower has now gone. 508 00:35:45,760 --> 00:35:48,479 And the money that was there 509 00:35:48,480 --> 00:35:53,920 for distribution across many mouths that were fed, is no longer there. 510 00:36:00,159 --> 00:36:02,238 There is a small chance that the public 511 00:36:02,239 --> 00:36:05,959 might be able to actually see what Markus Jooste really looks like. 512 00:36:05,960 --> 00:36:08,879 The Standing Committee on Finance has taken a draft resolution 513 00:36:08,880 --> 00:36:12,480 today to issue a summons for Mr Jooste. 514 00:36:19,000 --> 00:36:21,479 Do you swear that the evidence you are about to give 515 00:36:21,480 --> 00:36:24,800 is the truth, the whole truth, and nothing but the truth? 516 00:36:34,800 --> 00:36:39,638 I thought it important to share with the honourable committees here today 517 00:36:39,639 --> 00:36:42,879 the events, and the sequence of events, 518 00:36:42,880 --> 00:36:47,518 that led to the incidents of December 2017. 519 00:36:47,519 --> 00:36:50,479 I was only about two meters from him, and I had an opportunity 520 00:36:50,480 --> 00:36:54,480 to sort of observe him very carefully during those hearings. 521 00:36:55,199 --> 00:36:56,598 He was quite formidable. 522 00:36:56,599 --> 00:37:00,439 This was not the first time that he'd had to take tough questions. 523 00:37:00,440 --> 00:37:05,598 And of course, because of his position, he had superior technical knowledge. 524 00:37:05,599 --> 00:37:09,879 And I got the impression that he was utterly ruthless. 525 00:37:09,880 --> 00:37:12,120 And I remember thinking, you know, this man would, 526 00:37:12,121 --> 00:37:14,919 you know, happily drown a bag of cats. 527 00:37:14,920 --> 00:37:18,839 I would like to take the honourable committees slightly back. 528 00:37:18,840 --> 00:37:23,678 2007, Steinhoff formed 529 00:37:23,679 --> 00:37:26,879 a joint venture strategic partnership 530 00:37:27,760 --> 00:37:30,840 with Dr Andreas Seifert of Austria. 531 00:37:31,639 --> 00:37:34,198 The vision between Steinhoff and Seifert 532 00:37:34,199 --> 00:37:38,558 was to form a large European household discount chain 533 00:37:38,559 --> 00:37:40,519 that could compete with IKEA. 534 00:37:41,000 --> 00:37:45,638 Unfortunately it turned out that Dr Seifert was the wrong person 535 00:37:45,639 --> 00:37:47,279 to go into business with, 536 00:37:47,280 --> 00:37:53,000 and Steinhoff's association with Seifert was terminated in March 2015. 537 00:37:54,000 --> 00:37:57,360 During 2015, Steinhoff learned 538 00:37:58,000 --> 00:38:02,279 that our ex-strategic partner, Dr Seifert, 539 00:38:02,280 --> 00:38:05,440 made various statements to the German tax authorities. 540 00:38:06,079 --> 00:38:08,319 It was Steinhoff's and my view 541 00:38:08,320 --> 00:38:12,718 that Seifert was attempting to use public prosecutors, 542 00:38:12,719 --> 00:38:16,118 capital market regulators and the press 543 00:38:16,119 --> 00:38:20,518 to assist him in his unfounded attempts to obtain information 544 00:38:20,519 --> 00:38:26,158 and to influence the outcome of the courts in the ongoing civil litigations. 545 00:38:26,159 --> 00:38:29,238 Seifert is the one who is the arch villain in this particular picture 546 00:38:29,239 --> 00:38:32,759 painted by Markus, and has created this false picture of a company 547 00:38:32,760 --> 00:38:36,080 that is actually fine, but which has been unfairly targeted 548 00:38:36,081 --> 00:38:40,158 and smeared, and Markus, as a result, has been unfairly targeted and smeared. 549 00:38:40,159 --> 00:38:46,038 And my discussion with Dr Wiese and the legal advisers 550 00:38:46,039 --> 00:38:52,439 was that the supervisory board should replace Deloitte, at that stage, 551 00:38:52,440 --> 00:38:55,759 with a firm that was prepared to sign off by the end of January 552 00:38:55,760 --> 00:38:57,598 to meet the deadline. 553 00:38:57,599 --> 00:39:03,839 And I made it very clear that if that is not the way the board would want to go, 554 00:39:03,840 --> 00:39:05,839 I don't see my way forward. 555 00:39:05,840 --> 00:39:09,799 We know the numbers which Christo reportedly lost 556 00:39:09,800 --> 00:39:11,879 when the whole group collapsed. 557 00:39:11,880 --> 00:39:15,279 What about you and your family trust and everything else? 558 00:39:15,280 --> 00:39:19,520 On what day do you want to take the share price? The day before the collapse? 559 00:39:19,521 --> 00:39:23,879 Don't get now disingenuous. On the day of the collapse. 560 00:39:23,880 --> 00:39:27,000 Then it is roughly about R3 billion. 561 00:39:27,960 --> 00:39:32,720 I would imagine that if I was going to be losing R3 billion, 562 00:39:33,480 --> 00:39:38,840 I would not just up and leave after 29 years of service, 563 00:39:39,639 --> 00:39:42,118 just on the basis of one decision. 564 00:39:42,119 --> 00:39:45,999 You literally, with all due respect, sir, threw your toys out the cot. 565 00:39:46,639 --> 00:39:48,518 I'm not convinced by that at all. 566 00:39:48,519 --> 00:39:53,359 I went through a two-and-a-half-year period, 567 00:39:54,280 --> 00:40:00,518 dealing with the issues from when the German tax investigation started, 568 00:40:00,519 --> 00:40:03,919 the legal fights with Seifert. 569 00:40:03,920 --> 00:40:06,359 And my personal view was 570 00:40:06,360 --> 00:40:12,839 that the start of a new, brand new, investigation on the 5th of December 571 00:40:12,840 --> 00:40:15,160 will not be completed. 572 00:40:15,840 --> 00:40:18,279 Why will it be completed quicker than two years 573 00:40:18,280 --> 00:40:20,560 if all the other people have taken two years? 574 00:40:21,199 --> 00:40:24,638 And therefore, I knew that the company will be left 575 00:40:24,639 --> 00:40:30,639 in absolute limbo and obviously pointing fingers at me as the CEO. 576 00:40:31,119 --> 00:40:35,038 And at that stage, that was my decision, that I had enough. 577 00:40:35,039 --> 00:40:39,479 It was not about losing money or what was at stake. 578 00:40:44,639 --> 00:40:49,198 [Dr Giada Del Fabbro] What stands out is he's deflecting blame 579 00:40:49,199 --> 00:40:52,159 and responsibility to others or other situations. 580 00:40:54,679 --> 00:40:56,959 These are traits we find quite consistently 581 00:40:56,960 --> 00:40:58,640 in antisocial personality disorder. 582 00:40:58,641 --> 00:41:02,638 So these individuals also don't appreciate the consequences of their actions 583 00:41:02,639 --> 00:41:04,479 in a way that would inhibit their behaviour. 584 00:41:04,480 --> 00:41:08,160 And if you feel confident in your ability to deflect blame, 585 00:41:08,161 --> 00:41:10,759 then you do feel like you are untouchable. 586 00:41:13,199 --> 00:41:17,759 That inability to conceptualise or entertain the idea 587 00:41:17,760 --> 00:41:20,238 that he could be found guilty. 588 00:41:20,239 --> 00:41:23,879 He quite effectively almost cast himself as a victim. 589 00:41:23,880 --> 00:41:25,160 I didn't buy it. 590 00:41:25,161 --> 00:41:28,679 And I don't think that many members of the committee bought it. 591 00:41:29,519 --> 00:41:32,119 What Mr Jooste is doing 592 00:41:32,480 --> 00:41:37,479 is to now shift the blame to the strategic partner. 593 00:41:37,480 --> 00:41:42,198 I'm not sure if Markus believes what he said entirely 594 00:41:42,199 --> 00:41:45,079 or if it's a narrative he constructed and is sticking to. 595 00:41:46,239 --> 00:41:50,678 "This is just a grudge by my former colleague and my peer, Andreas Seifert, 596 00:41:50,679 --> 00:41:52,239 to make me look bad." 597 00:41:52,800 --> 00:41:56,600 Now, that is a story that doesn't appear to hold water. 598 00:42:06,000 --> 00:42:11,558 The fact is, a forensic audit of Steinhoff by PWC found 6.5 billion, 599 00:42:11,559 --> 00:42:16,359 R106 billion, of fictitious transactions over more than a decade. 600 00:42:16,360 --> 00:42:20,839 It's unlikely that a R106 billion in fictitious deals over ten years 601 00:42:20,840 --> 00:42:24,440 is created by Andreas Seifert as part of a grudge. 602 00:42:25,440 --> 00:42:29,839 I worked 29 years for this company every day of my life to build it, 603 00:42:29,840 --> 00:42:34,319 and to travel all over the world, traveling 200 days a year 604 00:42:34,320 --> 00:42:36,200 into the different countries of the world. 605 00:42:36,201 --> 00:42:40,118 And therefore it saddened me what has happened to Steinhoff. 606 00:42:40,119 --> 00:42:43,959 It was a business creating more than a hundred thousand jobs. 607 00:42:44,639 --> 00:42:47,158 You know, you're coming across 608 00:42:47,159 --> 00:42:50,518 almost like you're a Mother Teresa of Steinhoff, right? 609 00:42:50,519 --> 00:42:55,238 I can only say that I'm trying my best this morning to answer the questions 610 00:42:55,239 --> 00:42:58,239 to the best of my ability, and to the knowledge that I have. 611 00:42:58,920 --> 00:43:04,760 The word scandal is now the writers of sensation. 612 00:43:06,679 --> 00:43:11,679 Jooste is a very clever, very slick and a very slippery operator. 613 00:43:12,400 --> 00:43:16,160 You know, he knows where all the bodies are buried because he buried them. 614 00:43:16,760 --> 00:43:22,118 In fact, he was the undertaker and he owns the cemetery as well. 615 00:43:22,119 --> 00:43:25,319 So there's no way that you're gonna catch him out 616 00:43:26,159 --> 00:43:32,799 in divulging the most inner secrets of his most inner balance sheet, as it were. 617 00:43:36,920 --> 00:43:41,160 He presented a sort of almost a veneer of respect for the committee. 618 00:43:41,161 --> 00:43:42,839 But I could almost feel 619 00:43:42,840 --> 00:43:46,200 that sort of as he became more comfortable in the environment, 620 00:43:46,201 --> 00:43:48,678 as he became more confident in the environment, 621 00:43:48,679 --> 00:43:52,078 that arrogance started to show. 622 00:43:52,079 --> 00:43:56,799 And so I thought that I would put a question to him that would rattle him. 623 00:43:57,239 --> 00:44:01,439 The bolt from the blue finally struck on or about 624 00:44:01,440 --> 00:44:05,160 Monday, the 5th of December 2017. 625 00:44:05,719 --> 00:44:12,399 One of the people who you once regarded as a friend 626 00:44:12,400 --> 00:44:18,640 apparently referred to you as, and I quote, "a fucking psychopath," 627 00:44:19,599 --> 00:44:24,799 presumably because you had lied to him convincingly for years. 628 00:44:25,639 --> 00:44:29,638 Is it an accurate description of your personality? 629 00:44:29,639 --> 00:44:32,359 I would like to say that I never lied 630 00:44:32,360 --> 00:44:36,160 about the activities of the company as the allegation was made. 631 00:44:36,161 --> 00:44:39,359 Mr Jooste, what surprises me most about your evidence 632 00:44:39,360 --> 00:44:42,760 is there is no contrition, no apology... 633 00:44:45,199 --> 00:44:48,199 to the thousands of people, 634 00:44:48,679 --> 00:44:53,919 who you yourself concede suffered major financial loss. 635 00:44:53,920 --> 00:44:57,600 I think in distancing himself when working with other people's money, 636 00:44:57,601 --> 00:44:59,799 there was this illusion that his hands were clean. 637 00:44:59,800 --> 00:45:03,240 For that reason, it might be hard for him to conceptualize 638 00:45:03,241 --> 00:45:05,919 that he would hold the ultimate responsibility for that. 639 00:45:11,320 --> 00:45:14,200 [Alec Hogg] You know, psychologists talk about sociopaths 640 00:45:14,201 --> 00:45:18,879 and sociopaths are predators 641 00:45:18,880 --> 00:45:22,560 and they can see where your weak spots are. 642 00:45:23,679 --> 00:45:30,399 And they know how to manipulate others who are close to them and around them 643 00:45:30,400 --> 00:45:33,000 in such a way as they can gain advantage. 644 00:45:35,480 --> 00:45:37,960 I don't feel sympathetic towards him at all. 645 00:45:38,440 --> 00:45:40,759 I think Markus knew exactly what he was doing. 646 00:45:40,760 --> 00:45:46,000 He knew exactly who he was using and manipulating, 647 00:45:47,039 --> 00:45:51,159 and he hasn't even tried to say sorry. 648 00:45:51,760 --> 00:45:57,158 One mistake we must not make is to call these accounting irregularities 649 00:45:57,159 --> 00:45:59,839 or all these other fancy terms 650 00:45:59,840 --> 00:46:04,280 which sanitizes the tragedy and crisis before us. This is pure corruption. 651 00:46:05,159 --> 00:46:08,718 Because we treat the public sector with that kind of outlook. 652 00:46:08,719 --> 00:46:13,198 So I'm just saying, it can't be different strokes for different folks. 653 00:46:13,199 --> 00:46:17,198 That was the bracing reality, I think, for the country to realize after Steinhoff 654 00:46:17,199 --> 00:46:20,238 that what was happening in the wider society had infiltrated 655 00:46:20,239 --> 00:46:24,159 other parts of society that people thought were somehow immune from it. 656 00:46:24,519 --> 00:46:25,678 Fraud and corruption. 657 00:46:25,679 --> 00:46:27,038 No accountability. 658 00:46:27,039 --> 00:46:28,359 Serious allegations. 659 00:46:28,360 --> 00:46:30,479 - State Capture. - The State Capture Inquiry. 660 00:46:30,480 --> 00:46:31,600 The State Capture Commission. 661 00:46:31,601 --> 00:46:33,919 It cost the economy billions. 662 00:46:33,920 --> 00:46:36,600 The Guptas were benefiting from government work, 663 00:46:36,601 --> 00:46:40,279 helped by the executive powers of former president Jacob Zuma. 664 00:46:40,280 --> 00:46:42,560 He's never taken responsibility for anything. 665 00:46:43,079 --> 00:46:46,439 [Rob Rose] During the Zuma years sort of after 2011, what we found out, 666 00:46:46,440 --> 00:46:48,959 essentially the country was being run by a shadow government. 667 00:46:48,960 --> 00:46:53,359 That we had people pulling the strings from behind the president, Jacob Zuma. 668 00:46:53,360 --> 00:46:56,200 And all of this was essentially the state capture years. 669 00:46:56,201 --> 00:46:59,718 Until people are caught they will continue doing it. 670 00:46:59,719 --> 00:47:02,558 For a long time our corporate sector was lauded internationally. 671 00:47:02,559 --> 00:47:05,078 We had the strongest auditing standards in the world. 672 00:47:05,079 --> 00:47:07,759 We had the strongest corporate governance systems. 673 00:47:07,760 --> 00:47:11,279 And then corporate ethics began to fray too, to some extent. 674 00:47:11,280 --> 00:47:15,279 There are a number of public institutions and public sector institutions 675 00:47:15,280 --> 00:47:17,799 that were simply hollowed out. 676 00:47:17,800 --> 00:47:22,718 The National Prosecuting Authority was one of the main sites of capture 677 00:47:22,719 --> 00:47:27,319 during the Jacob Zuma era, which allowed Markus Jooste to get away 678 00:47:27,320 --> 00:47:32,518 with much more than, you would argue, he would have gotten away with 679 00:47:32,519 --> 00:47:34,079 had these institutions functioned. 680 00:47:34,559 --> 00:47:37,198 And afterwards, we've seen a rash of corporate scandals. 681 00:47:37,199 --> 00:47:40,919 We've seen Tongaat Hulett, we've seen VBS Mutual Bank and a number of other ones 682 00:47:40,920 --> 00:47:44,240 which indicate that certainly things were happening in the margin. 683 00:47:44,241 --> 00:47:47,158 And I think that Steinhoff was the big symbol of that, of how 684 00:47:47,159 --> 00:47:49,199 we lost our way in the corporate sector. 685 00:47:50,000 --> 00:47:54,520 Because many of these accounting firms not only aided and abetted state capture, 686 00:47:54,521 --> 00:47:57,038 but aided and abetted Markus Jooste 687 00:47:57,039 --> 00:47:59,879 to create this fiction of a multibillion dollar company 688 00:47:59,880 --> 00:48:03,000 which clearly was found on sand. 689 00:48:03,880 --> 00:48:06,319 [Graham Theobald] You can't get a one-sided corruption. 690 00:48:06,320 --> 00:48:08,759 There's got to be two sides. 691 00:48:08,760 --> 00:48:10,718 The money's got to flow 692 00:48:10,719 --> 00:48:13,799 and it's got to come from somewhere and it's got to go somewhere. 693 00:48:14,400 --> 00:48:17,600 So trust in our institutions starts eroding. 694 00:48:18,519 --> 00:48:21,558 And, you know, and when that happens, 695 00:48:21,559 --> 00:48:25,638 then personal value systems get compromised. 696 00:48:25,639 --> 00:48:28,678 If Bain & Company can do it, why can't I? 697 00:48:28,679 --> 00:48:30,759 And how do you correct that? 698 00:48:33,199 --> 00:48:35,439 [Pieter du Toit] It was multiple systems failure. 699 00:48:35,440 --> 00:48:40,759 You can't pin it on one system that did not do what it was supposed to do. 700 00:48:40,760 --> 00:48:44,200 It was systems in the private sector, systems in the public sector, 701 00:48:44,201 --> 00:48:46,879 and in this void stepped Markus Jooste. 702 00:48:51,519 --> 00:48:54,199 You come in here and you act like nothing is wrong! 703 00:48:55,159 --> 00:48:56,999 You must be ashamed of yourself! 704 00:48:58,119 --> 00:49:02,238 [Thys du Toit] South Africa needs resources. It needs savings. 705 00:49:02,239 --> 00:49:04,839 And if South Africa is defrauded, 706 00:49:04,840 --> 00:49:09,759 be it by the Guptas, be it by Jooste, you're depleting that savings base, 707 00:49:09,760 --> 00:49:11,960 that very necessary capital. 708 00:49:13,599 --> 00:49:17,558 Employment is not created by the State. Employment is created 709 00:49:17,559 --> 00:49:21,198 by creating an environment for entrepreneurs to flourish in. 710 00:49:21,199 --> 00:49:24,678 And if the savings base of South Africa is depleted 711 00:49:24,679 --> 00:49:29,078 then the capital available to people that create jobs disappear. 712 00:49:29,079 --> 00:49:34,118 And that's basically what the Guptas did in a big, big way with state capture. 713 00:49:34,119 --> 00:49:37,439 And that is what Jooste did with Steinhoff. 714 00:49:37,440 --> 00:49:40,880 And as a result, the entire population suffers. 715 00:49:42,519 --> 00:49:45,558 One typically points the finger at the politicians. 716 00:49:45,559 --> 00:49:50,439 But here is a clear case of where the private sector is also at blame. 717 00:49:51,639 --> 00:49:54,439 You know, people will learn a lesson from this. 718 00:49:55,360 --> 00:49:57,598 And a few years from now, 719 00:49:57,599 --> 00:50:00,879 bet your bottom dollar you run the risk again. 720 00:50:00,880 --> 00:50:05,600 I mean, Steinhoff was scarcely cold when Tongaat happened. 721 00:50:06,760 --> 00:50:10,078 And the rest! It will happen again. 722 00:50:10,079 --> 00:50:14,078 It's amazing that you say that, because people talk about how we must stop this 723 00:50:14,079 --> 00:50:16,879 and bulletproof it from happening again. But you don't think it's possible? 724 00:50:16,880 --> 00:50:19,840 Well, why didn't they stop it after Enron and Madoff? 725 00:50:27,920 --> 00:50:30,680 [Bernard Agulhas] We have fragmented regulation in South Africa at the moment. 726 00:50:30,681 --> 00:50:33,678 That means that only auditors are regulated. 727 00:50:33,679 --> 00:50:37,639 Only auditors are held to account for an audit failure. 728 00:50:38,239 --> 00:50:41,879 Audit committee members, board members... You can take away their designations, 729 00:50:41,880 --> 00:50:44,799 but you can't stop them from carrying on and doing the same work, 730 00:50:44,800 --> 00:50:47,879 whereas an auditor's license can be withdrawn. 731 00:50:47,880 --> 00:50:51,279 That is because there's an act that regulates auditors. 732 00:50:51,280 --> 00:50:55,279 The other portions of the financial reporting chain, or the ecosystem, 733 00:50:55,280 --> 00:50:56,439 is not regulated. 734 00:50:56,440 --> 00:50:59,160 What applies to the auditors should also apply to them. 735 00:50:59,840 --> 00:51:02,600 All those role players should be subject to regulation. 736 00:51:03,079 --> 00:51:04,678 They should also be held to account 737 00:51:04,679 --> 00:51:08,038 in the same way that an auditor's license can be taken away from them. 738 00:51:08,039 --> 00:51:10,359 And we don't have that at the moment. 739 00:51:25,639 --> 00:51:31,919 I think everyone in the end ended up in a good position, not ideal. 740 00:51:32,400 --> 00:51:36,959 And that's probably the hallmarks of any settlement, ultimately. 741 00:51:36,960 --> 00:51:40,158 Everyone is a little bit frustrated, 742 00:51:40,159 --> 00:51:42,559 which means it's probably a good settlement. 743 00:51:51,760 --> 00:51:57,198 The settlement was... [chuckles] Relative to the damage that was done, 744 00:51:57,199 --> 00:51:59,399 I think they got off lightly. 745 00:52:00,239 --> 00:52:04,558 But it was in the shareholders' interest to some extent that... 746 00:52:04,559 --> 00:52:05,879 they salvage the company. 747 00:52:05,880 --> 00:52:11,238 Because if the settlement were significantly bigger, 748 00:52:11,239 --> 00:52:16,879 they would've had to close Steinhoff, and that would've been a bigger problem. 749 00:52:16,880 --> 00:52:18,600 Maybe there would've been job losses. 750 00:52:21,800 --> 00:52:24,959 [Jean Pierre Verster] Yes, I do think Steinhoff is on a path to recovery. 751 00:52:24,960 --> 00:52:26,399 It's gonna be a bumpy path. 752 00:52:26,400 --> 00:52:29,600 There was definitely a probability that Steinhoff would be liquidated. 753 00:52:29,601 --> 00:52:31,479 It would cease to exist, 754 00:52:31,480 --> 00:52:35,359 and equity holders would lose all their investments if that had happened. 755 00:52:35,360 --> 00:52:39,319 Debt holders would lose a large chunk of their investment. 756 00:52:39,320 --> 00:52:42,799 So the new management team that was brought in 757 00:52:42,800 --> 00:52:47,320 to sort of mop up the problems has done a great job to do that. 758 00:52:47,880 --> 00:52:51,080 [Louis du Preez] We've changed the business model significantly. 759 00:52:51,081 --> 00:52:56,319 In some instances by necessity, in others by design. 760 00:52:56,320 --> 00:52:58,359 Look, we're not out of the woods yet. 761 00:52:58,360 --> 00:53:03,479 We believe everyone and anyone who has a share in this company today 762 00:53:03,480 --> 00:53:06,678 will have all the information at their disposal 763 00:53:06,679 --> 00:53:11,718 to make an informed decision if they want to hold or sell or buy into the company. 764 00:53:11,719 --> 00:53:16,518 And I think the share price is definitely recovered somewhat. 765 00:53:16,519 --> 00:53:21,598 It's definitely not at the levels that it was in December 2017. 766 00:53:21,599 --> 00:53:23,719 But that's now behind us. 767 00:53:26,280 --> 00:53:28,319 [Thys du Toit] It is essential that Steinhoff survives 768 00:53:28,320 --> 00:53:31,720 because obviously they are one of the main claimants against Jooste 769 00:53:31,721 --> 00:53:36,158 and so it's essential that they survive for that court case to go ahead. 770 00:53:36,159 --> 00:53:39,518 What makes me more despondent is the fact that there's so little progress 771 00:53:39,519 --> 00:53:41,359 from the National Prosecuting Authority's side. 772 00:53:41,360 --> 00:53:42,680 [sirens wailing] 773 00:53:44,760 --> 00:53:47,959 I don't believe the Hawks have started their investigation yet. 774 00:53:47,960 --> 00:53:52,999 Does the NPA have the capacity to successfully prosecute billionaires 775 00:53:53,000 --> 00:53:56,359 who are going to be going to court, if they do end up in court, 776 00:53:56,360 --> 00:53:59,959 backed up by teams of legal experts? I don't know! 777 00:53:59,960 --> 00:54:03,078 If you steal R100 000, you go to jail. 778 00:54:03,079 --> 00:54:07,158 If you basically defraud a company of R100 billion, you don't go to jail. 779 00:54:07,159 --> 00:54:12,198 If Markus Jooste and his accomplices were in fact prosecuted and convicted, 780 00:54:12,199 --> 00:54:16,399 that would be a significant deterrence to commercial crime in South Africa. 781 00:54:16,400 --> 00:54:21,759 He's no closer to the inside of a jail cell today as he was in December 2017. 782 00:54:21,760 --> 00:54:24,359 This thing about white collar crime 783 00:54:24,360 --> 00:54:30,799 of being treated differently from other kinds of crime is unacceptable. 784 00:54:30,800 --> 00:54:32,080 [Twitter whistle] 785 00:54:35,800 --> 00:54:37,160 [Twitter whistle] 786 00:54:41,159 --> 00:54:42,439 [Twitter whistle] 787 00:54:46,760 --> 00:54:48,640 You see, the evidence is there. 788 00:54:48,641 --> 00:54:54,399 FEDUSA and our biggest union, the Public Servants Association, the PSA. 789 00:54:54,400 --> 00:54:58,118 We went to their offices in Stellenbosch. 790 00:54:58,119 --> 00:55:00,399 We collected all the minutes. 791 00:55:00,400 --> 00:55:03,999 We want to give those documents over to the Hawks and say, 792 00:55:04,000 --> 00:55:09,558 "Guys, you've got the responsibility in terms of the constitution to prosecute. 793 00:55:09,559 --> 00:55:12,319 Prosecute these people!" What is the problem? 794 00:55:17,800 --> 00:55:21,000 [reporter3] Is the net closing in on former Steinhoff CEO? 795 00:55:21,519 --> 00:55:24,879 The regulator found Jooste complicit in insider trading. 796 00:55:24,880 --> 00:55:26,560 [reporter4] Jooste warned his driver, 797 00:55:26,561 --> 00:55:30,839 a friend, and a business partner to dispose of their Steinhoff shares. 798 00:55:30,840 --> 00:55:32,518 [message alert] 799 00:55:32,519 --> 00:55:35,479 [Rob Rose] It took the regulator a year or two to investigate this. 800 00:55:35,480 --> 00:55:38,560 The regulator, the Financial Sector Conduct Authority, 801 00:55:38,561 --> 00:55:41,879 slapped the largest fine on anyone in its history for insider trading. 802 00:55:41,880 --> 00:55:44,440 It was a landmark fine in their case. 803 00:56:00,079 --> 00:56:04,479 [Fifi Peters] Insider trading can be explained through a game of blackjack. 804 00:56:04,480 --> 00:56:08,038 If the dealer gives me a peek of the next card 805 00:56:08,039 --> 00:56:11,518 and only me, not the other players, 806 00:56:11,519 --> 00:56:15,719 then I have some inside knowledge that can ensure that I win. 807 00:56:16,920 --> 00:56:20,158 Let's imagine the dealer was the CEO of a company 808 00:56:20,159 --> 00:56:22,919 with knowledge of what's about to unfold. 809 00:56:23,440 --> 00:56:26,160 Maybe evidence of fraud is going to be uncovered, 810 00:56:26,161 --> 00:56:28,719 which will make the share price plunge. 811 00:56:29,320 --> 00:56:33,399 If the CEO discloses that information to a third party 812 00:56:33,400 --> 00:56:36,038 before it becomes public knowledge 813 00:56:36,039 --> 00:56:39,319 and they sell their shares to avoid losses... 814 00:56:39,320 --> 00:56:41,720 That's insider trading. 815 00:56:42,320 --> 00:56:45,759 It's illegal, and it's exactly what Markus Jooste did 816 00:56:45,760 --> 00:56:47,800 in November 2017. 817 00:56:49,679 --> 00:56:53,359 The legal system, in being fair, 818 00:56:54,199 --> 00:56:59,959 also allows those who have money and the resources 819 00:57:00,880 --> 00:57:03,840 to take advantage of it. 820 00:57:04,599 --> 00:57:09,439 To continue over decades 821 00:57:09,440 --> 00:57:13,078 in defending their case, often on technicalities. 822 00:57:13,079 --> 00:57:15,959 We see many examples of that here in South Africa. 823 00:57:23,440 --> 00:57:26,919 He was fined more then R160 million, 824 00:57:26,920 --> 00:57:30,439 and the driver was fined R18 000. 825 00:57:30,440 --> 00:57:33,399 The driver already paid his R18 000, 826 00:57:33,400 --> 00:57:37,359 Markus has not paid his R160-something million, 827 00:57:37,360 --> 00:57:41,760 but he's free, living his life. Where's justice there? 828 00:57:47,360 --> 00:57:50,320 That is unfair. That's what we need to end as a country. 829 00:57:50,840 --> 00:57:55,999 It doesn't matter who you are, whether you're poor or rich, or black and white, 830 00:57:56,000 --> 00:58:00,520 male or female, you should be able to be treated the same. 831 00:58:01,039 --> 00:58:05,359 It's not helping the country to heal from a reconciliation point of view. 832 00:58:05,360 --> 00:58:07,919 Because it creates this tension that we always have. 833 00:58:07,920 --> 00:58:12,799 If we want to create an equal, or equitable society, 834 00:58:12,800 --> 00:58:16,360 we need to make sure that we are seen to be treating people equally. 835 00:58:27,320 --> 00:58:33,158 He apparently does knock around in his Bentley 4x4. 836 00:58:33,159 --> 00:58:36,678 From time to time he's seen early in the morning 837 00:58:36,679 --> 00:58:39,718 going into a coffee shop in Hermanus 838 00:58:39,719 --> 00:58:45,799 with a cap drawn over his face, and scarves, so he's not recognizable. 839 00:58:47,000 --> 00:58:49,479 [Rob Rose] He is something of a pariah in Hermanus 840 00:58:49,480 --> 00:58:51,279 partly because so many people in that town 841 00:58:51,280 --> 00:58:55,319 had bought into his vision of Steinhoff and had lost a lot of money on that. 842 00:58:55,320 --> 00:58:58,279 So the rumours of Markus-spotting has become a bit of a sport 843 00:58:58,280 --> 00:59:00,999 in places like Stellenbosch and Cape Town, where people say, 844 00:59:01,000 --> 00:59:04,600 "I saw him at Lanzerac last week." "I saw him in a restaurant in Cape Town." 845 00:59:04,601 --> 00:59:06,399 But it's got to be a terrible life. 846 00:59:06,400 --> 00:59:08,999 I know Ingrid, his wife has stuck by him, 847 00:59:09,000 --> 00:59:12,198 which, given all the publicity of his affairs, 848 00:59:12,199 --> 00:59:16,718 and the very public nature of those is in itself quite extraordinary. 849 00:59:16,719 --> 00:59:20,558 There are frequent pictures of the walls outside his house being painted with 850 00:59:20,559 --> 00:59:23,879 very mean slogans every day, and having to be repainted the whole time. 851 00:59:29,559 --> 00:59:32,518 [Thys du Toit] I think his circle of friends have changed a bit, 852 00:59:32,519 --> 00:59:35,078 but he had what I used to call his praise singers. 853 00:59:35,079 --> 00:59:37,198 His "raasbende" his "imbongi". 854 00:59:37,199 --> 00:59:40,598 He had these people that always tagged along for freebies 855 00:59:40,599 --> 00:59:45,198 and I'm sure they're all still frequenting him, and they see him often. 856 00:59:45,199 --> 00:59:48,999 I haven't seen him. I often wonder what I would do if I do see him. 857 00:59:49,639 --> 00:59:51,319 But let me not elaborate. 858 00:59:55,039 --> 00:59:57,198 [Rob Rose] Did Markus apologize to you personally? 859 00:59:57,199 --> 00:59:58,319 No. 860 00:59:58,320 --> 01:00:02,279 If you were to see Markus just walking here today, what would you say to him? 861 01:00:02,280 --> 01:00:05,480 - I should say, "Markus, fuck off." - [both laughing] 862 01:00:08,880 --> 01:00:12,680 [director] If Markus was sitting in front of you, what would you like to ask him? 863 01:00:12,681 --> 01:00:15,959 "Are you okay?" And I hope that he is. 864 01:00:15,960 --> 01:00:18,319 I'll ask him, ' "Why?" 865 01:00:18,320 --> 01:00:24,839 And, "How did you think you could get through it, you know, ad infinitum?" 866 01:00:24,840 --> 01:00:28,720 And then, being a little bit personal, "Why did you target me?" 867 01:00:29,199 --> 01:00:32,359 This isn't a normal person. 868 01:00:33,119 --> 01:00:35,399 You've got to be an artist, 869 01:00:35,400 --> 01:00:40,360 knowing every button to push with every person. 870 01:00:50,320 --> 01:00:52,959 [Dr Giada Del Fabbro] Money and status does not change people. 871 01:00:52,960 --> 01:00:55,200 For the large part, they are who they are. 872 01:00:55,201 --> 01:00:59,359 And then, the way in which that money and status is expressed or used, 873 01:00:59,360 --> 01:01:01,560 is a reflection of their morality. 874 01:01:02,239 --> 01:01:05,558 You know, you don't find people suddenly becoming corrupt 875 01:01:05,559 --> 01:01:07,119 when they have a lot of money. 876 01:01:07,760 --> 01:01:10,439 It's really a trajectory, where, from early on, 877 01:01:10,440 --> 01:01:14,279 their internal world has been formed in the way 878 01:01:14,280 --> 01:01:16,359 that they are entitled to get what they need, 879 01:01:16,360 --> 01:01:20,840 even if that means hurting other people, breaking a law. 880 01:01:21,360 --> 01:01:26,760 Whatever he's got, he should hand it over because it was ill-gotten gains. 881 01:01:27,239 --> 01:01:28,919 He needs to pay the price. 882 01:01:28,920 --> 01:01:31,759 The evidence is just so overwhelming 883 01:01:31,760 --> 01:01:36,558 and the cost to society is so huge, 884 01:01:36,559 --> 01:01:40,359 that to continue denying it, you're only doing it for one reason, 885 01:01:40,360 --> 01:01:42,160 and that is for self-preservation. 886 01:01:42,161 --> 01:01:44,038 I speak to the police and ask them. 887 01:01:44,039 --> 01:01:48,078 They said they're very confident they're... 888 01:01:48,079 --> 01:01:50,959 gonna get this case in court soon. 889 01:01:50,960 --> 01:01:54,759 But I mean, "soon" for the police might be in six months' time. 890 01:01:54,760 --> 01:01:59,080 But I am definitely checking up on them constantly. I'm not giving up. 891 01:01:59,081 --> 01:02:01,198 I'm sure he'll go to jail. 892 01:02:01,199 --> 01:02:03,919 It's so glaringly obvious. 893 01:02:03,920 --> 01:02:06,839 I'm sure that he has a million reasons 894 01:02:06,840 --> 01:02:09,799 how, why, and what he did and why he did it. 895 01:02:09,800 --> 01:02:16,038 If he wants to be the macho Afrikaner that he claims to be, then be that man. 896 01:02:16,039 --> 01:02:18,799 Stand up and have integrity. 897 01:02:18,800 --> 01:02:25,080 Admit to the world what you did, face the consequences of that, and let us move on. 898 01:02:25,559 --> 01:02:27,799 But otherwise, Markus is just a gangster. 899 01:02:27,800 --> 01:02:30,720 He's just a street thug as far as I'm concerned. 85379

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