All language subtitles for Steinheist.S01E03.WEBRip.x264.Hi

We find that people steal
for, really, four reasons.

The first is because
they have to.

The second is that
you've found a way.

The third, and this is
where it starts to escalate,

is that you are
getting away with it.

And the fourth is that if you
are caught, the punishment...

is acceptable to you.

[reporter] shockwaves in
corporate South Africa.

[reporter] There were
accounting irregularities...

[reporter] ...accounting
irregularities...

Insider trading...

[reporter] ...and
possible tax fraud.

The South Africa retail giant lost
billions from its market value

on the JSE and in Frankfurt.

[reporter] Dark days lie ahead for
Steinhoff and its CEO, Markus Jooste.

[reporter] Investors
want answers.

[reporter] Jooste will also most
likely face criminal charges.

[Markus Jooste] I never lied about
the activities of the company

as the allegation was made. Obviously
they're pointing fingers at me.

[cellphone vibrating]

[message alert]

So it emerged that a few weeks
before that moment in December 2017

Markus Jooste had sent a message to
four of his closest friends saying that

what you need to do is probably
sell your shares right now.

[message alert]

That falls within the classic
definition of insider trading.

You know that something damaging
is coming down the line.

You know this if
you're Markus Jooste

because you are the cause
of what's happening.

He warned his driver.

He warned Ockie Oosthuizen and a
few others to sell their shares.

That's the easiest thing
to prosecute him on.

But it's a criminal thing. The
Hawks could arrest him on that.

This is a week before it collapsed,
because he knew this was gonna collapse.

That's the crazy part of it.

[reporter1] It was like a
storm tearing through the JSE.

The international retailers announced
that its CEO, Markus Jooste, has resigned.

The news caused the company's
share price to crash over 60%.

The immediate reaction in
Stellenbosch was much more acute.

Or, the shocked reaction, I
suppose, was much more acute

than in the rest of the country.

Because by that stage, Steinhoff
had already infiltrated this town

to such a degree that their
logo pretty much was everywhere.

For years, their shareholders
may have enjoyed fat dividends,

but for Steinhoff, the chickens
are coming home to roost.

Already people are talking about
Steinhoff as Africa's Enron.

[Pieter du Toit] A town which prides
itself on being a town for the elite

very quickly saw,

"We need to create distance between
ourselves, Jooste, and Steinhoff."

All the hoardings and
the advertising boards

was very swiftly removed and
relegated to a storage facility.

So, Stellenbosch saw
it's not temporary.

This is done and dusted.
This is permanent.

[Fifi Peters] Just a week ago,

Steinhoff was challenging world
furniture giant IKEA for dominance.

Now it has all gone to dust.

But for the old money, there was
a certain degree of schadenfreude.

Even though a lot of them owned Steinhoff
shares, and even though a lot of them

enjoyed the hospitality of Markus
Jooste quite often, you know.

I think there was
some duplicity around

some of these old
Stellenbosch moneyed classes,

people saying, [clicks
tongue] "I told you so."

I've lost 30 years of my work.

Will you sue him?

Well, you know, that's
part of the dicey things.

I wait until the facts
are on the table,

and then all the actions will
be taken that are necessary.

- Thank you very much, sir. All the best.
- My pleasure. Go well, bye-bye.

[Fifi Peters] It's been a
very expensive week for Wiese.

He lost $2.1 billion in one day.

His net worth has gone down from nearly
$6 billion to less than a billion.

He can't feel too good about
having lost R59 billion

less whatever he's recovered
in recent settlements.

Most of what was raised in
2009 actually materialized.

[director] How did you feel
personally at the time?

I guess at the end of the
day I felt vindicated.

It's about the right result
at the end of the day.

And the right result was that
Markus Jooste stepped down

as CEO of Steinhoff for things
that he shouldn't have been doing.

It's in my blood, doing the right
thing, and I strive to do that.

I don't always achieve what I should
and we all make mistakes along the way.

But ultimately, doing the right
thing is what it's all about.

[Jean Pierre Verster] So on one hand,
one feels good, if you do analysis

and your analysis pans out and
it shows that you were correct.

On the other side, I knew that a lot
of people would lose a lot of money,

so there's no joy when the
share price falls that sharply.

I was relieved that I
could at least protect

the value of the
investors in my fund

and make some money from
the fall in the share price.

[director] How much money did you
make on short selling Steinhoff?

[Jean Pierre Verster] We
made roughly R9 million.

But there was definitely
gonna be more pain

versus those that made money from the
incident, and I was aware of that.

To this day we don't really
know what transpired...

other than the fact that we
were told the share price,

as supported by various
professional bodies

was fairly priced.

If we knew that there would be an
event in the future of the business

that would drop that share
price from R75 to R5,

we would obviously never
have done that deal.

I hope no one would
have done a deal.

[director] You did your deal based on a
share price that was a house of cards.

So they say, and that's
how it stands today.

I think what was particularly aggrieving
to us is that we weren't paid at all.

Bernard Mostert joins us now.

There's four years
of litigation.

It's a case of trying to find your
way through the legal Gordian Knot.

One of the reasons why we
have litigated so aggressively

is that there must
be accountability

and there must be recourse
for events of this nature.

[Braam van Huyssteen]
It wasn't only about me.

I had a team, and that's
what concerned me most.

[Landezwa Dulaze] Braam is the main
shareholder who established the business,

but we all contributed
to the business.

So we felt, as staff, that
we were also defrauded.

I believe there's been crime
that has been committed here.

We're not the kind of a team that sits
there and wait for something to happen.

[Bernard Mostert] We have people in the
business who've been with us a long time.

And for them to hear, A, "What you
were promised you're not gonna get,"

and, B, "Your mentor and your
founder has been defrauded."

Very, very difficult to stomach.

We did have the resources
to go full steam ahead

once we knew that what was
promised to us wasn't what it was.

[Rob Rose] There were smaller
guys, various investors,

that swapped a stake in a fast-growing
company with good prospects

for something that ultimately
turned out to be a mirage.

So, a lot of the guys who had
shares in this growing company

were then left with
something pretty worthless.

In total I lost quite a few million from
Steinhoff, which is really a lot of money.

Hard-earned money that my wife and I
worked for in our various businesses

throughout the 50 years
of being an entrepreneur.

When things go wrong, it's human
nature to play the blame game.

Steinhoff's case
is no different.

Questions have been asked about

how billionaire Christo Wiese,
and the entire Steinhoff board,

did not know what was going on.

These are the kind of people
who we, as the public,

believe know what they're doing
when they're managing our money.

It's not only Christo Wiese
and the board and the auditors.

It's analysts, investors,
asset managers,

the PIC, who was the second
biggest shareholder in Steinhoff

for a number of years.

The PIC is then actually
the main investment agency

for the government
employment fund.

And all people working for the
government, the state officials,

and the pensioners are
co-owners of that fund.

Steinhoff was one of the
big organizations in which

the PIC invested in
order to grow the fund

to make sure that the benefits
could be paid to pensioners.

The Federation
would like to assure

government employee pension
fund members and pensioners

that their funds are fully
protected based on the fact

in the beginning, the
benefits are set out in law.

Market fluctuations do not affect
the quantum of the pension benefits.

We essentially have two
types of pension funds.

There is a pension fund where you put
in your money and you hope for the best.

We refer to that as a defined contribution
fund because you are only told

how much you need to put in,
which is your contribution.

We are hoping that over the
life of your employment then,

though the pension fund contributions
are invested in a manner

that leaves you better off.

On the other hand, we then have something
referred to as a defined benefit fund,

which is one that simply says
that if you work for so many years

and your salary is XYZ, when you
eventually retire on a particular date,

this is how much
you're going to get.

So the government employee pension
fund is a defined benefit model.

Under a defined benefit scheme,

the biggest risk that you face
is that at the point in time

when your employees
have to retire,

the money that's available

may not be sufficient to meet
the commitments that you've made.

Then, obviously, somebody has to step in
and top up whatever that deficit might be,

and in this case, it happens to
be the South African taxpayer.

The long-term effect is the big problem.
It's going to be a complete disaster.

[Zwelakhe Mnguni] There are smaller
pension funds that were invested.

Even my pension fund, wherever it
is, it would have been affected.

And if you think about widows
and orphans and security guards,

and, you know, I'm an ex-security
guard and actually those people,

they've got no means,
even if it was R5 000...

They've got no means of
recovering that R5 000.

It may be tiny amounts in absolute terms,
but relative to what those people own,

it's significant.

There is a bit of an emotional
connection to me that I know how it feels

and I know how difficult it is for them
every day to try and make their day wage.

I worked for six years as a security
guard and I saved up for university,

and I knew that I had a
passion for financial markets.

And yeah, that's
where I come from.

There were defenceless people
who are sweeping the streets,

working for the municipality, and now
they're caught up in the Steinhoff thing.

And it was particularly
for that reason

that I stood up and said,
"I'm going to the police

and I must give the police the evidence
that I, together with the team,

we have been saying there
is something wrong here."

So I felt that by
going to the police

it would actually give
us some retribution

for the investors,
for South Africa.

[Rob Rose] What happened at
Steinhoff, did it hit you financially?

It was very bad. Everything is
gone. The big money is gone.

So that was an absolute
uncomfortable for me

and for my family, to tell
to my family what is there.

For me Steinhoff is finished,
I have nothing to do with that.

You see, with my
business I was never home

to develop this company
in the whole world.

I think that is the truth. But now that
time is over. Now I have time enough.

And I'm a happy man with
85 years to survive.

And I want to have sport.

I want to have friendship or
to stay with people together.

That is the end of my life.

Markus... I don't
know what he's doing.

I only know that in South Africa,
all the big MDs in these companies,

these people have no
contact with Markus.

After December 2017, when Markus
resigns, he retreats to Hermanus.

In the months after the crash,

Steinhoff was scrambling hard
to figure out how to survive.

For a few days, Christo Wiese
took the reins as acting CEO

but soon resigned entirely from
the board when it became clear

that he was going to sue the
company for what he lost.

Heather Sonn is then appointed
as chair of Steinhoff

to, I suppose,
clean the thing up.

She had a formidable track record working
in New York and various other places,

and as an investment banker she
knew her way around finance.

So after they appointed the new
board, Christo Weise, Heather Sonn,

and a few others go to Parliament to
explain what has happened at Steinhoff.

On the first day that I was
asked to take this position,

I asked for a picture of the person
who lost the most, the biggest loser.

We couldn't find a picture, but that
is the picture that I keep in my mind.

And as long as there is hope that we can
get to some return for that individual,

those sets of individuals,
we will not stop trying.

People and households lost
money. My own father lost money,

a significant amount of money.

And so it was very clear that there were
going to be significant consequences.

I thought very
strongly at the time

Parliament has to be, sort of,
tough on crime in the public sector,

but also tough on crime
in the private sector,

and needed to start to scrutinize
what indeed had happened.

Your version, essentially,
was that Markus Jooste

perpetrated a massive
fraud all on his own,

and nobody knew
anything about it,

least of all the
non-executive directors.

It's a lot of, can I put it gently?
Waffle. Really, it's disappointing.

It's bordering on
demoralizing, actually.

And we feel that you're
not fully appreciating

the gravity of
what's at issue here.

[Louis du Preez] Heather and
I were the punching bags.

We were the ones that were
shouted and screamed at

because we were the
face of the company.

It got quite personal at times,

and people taking out their
frustration on you personally.

It's stuff that got said
in affidavits and in court.

Now, we all know that's
part of the game,

but it's, um... It's hard, personally,
and it's quite hard on the family.

The immediate task was just to
try and stabilize everything.

And no shareholder is going to
be prepared to keep their shares

in your company
without financials.

And here embarks the process to try
and get new financials in place.

That was part of the reason

why we embarked with a PWC
forensic investigation.

I and the management team
have weekly contact with PWC.

In fact, I've got two calls
a week, set up with them.

At the current moment, there's
more than a hundred people of PWC

that works on this
assignment across the world.

The costs for this company in
employing PWC is significant.

At the moment it runs
north of R200 million.

We had the unfortunate
position that Mr Jooste

wasn't around at the
time because he resigned.

Did Markus Jooste, in your
view, ever lie to you,

mislead you, or do
you think, use you?

I do believe that there was a
limited sharing of information

from Mr Jooste to myself.

You must bear in mind
that, at least in my view,

this practice commenced
a number of years ago.

So therefore, if you grow that
false profit every year, no person,

no auditor, no analyst will certainly
just by looking at the numbers, tell you,

"But here's something that changes
suddenly this year, here's false income!"

Because it started so long ago and just
every year it gets increased a little bit.

From my side, I'm
also deeply saddened

with the events that happened at
Steinhoff and all the money that was lost,

like the majority of people involved
in trying to save this business.

From my side, I also do not think
I did anything deliberately wrong.

[Rob Rose] Ben la Grange,
Steinhoff's former CFO,

was left in the lurch when
Jooste quit and disappeared.

He was left to
flounder in Parliament,

faced a series of questions to
which he just didn't have answers.

Ben was one of Markus's
most loyal lieutenants,

but when the going got tough,
Jooste left him in the cold.

PWC released the report just after
the close of the markets last Friday,

16 months after Markus Jooste
walked out of the building.

[reporter2] A report
by auditing firm PWC

named several executives, including
former CEO, Markus Jooste.

No one really knows
where Jooste is.

He still hasn't come
forward or spoken to anyone.

Mr Jooste, we understand,
is still in the country,

either in Stellenbosch or
at his home in Hermanus.

But having said that, there's
been no charges put to him,

so he really is free to
come and go as he pleases.

Just like a romantic
relationship when it ends,

when you look back you kind
of see the warning signs.

Having that reflection on your
professional relationship with Jooste,

do you have those warning signs?

No. Nothing, you know,
that would stick out,

that would certainly make you say,
"Whoops, let's look at this again."

In this instance, it was
literally a bolt out of the blue.

I always found it strange that he said
it came like a bolt out of the blue.

Could be a case of being blind to
what's actually going on, because

if you get too close to the management
team, you sort of lose your objectivity.

So, I wouldn't be surprised if
Christo Wiese lost his objectivity

in terms of seeing, actually, that
he was gonna be taken for a ride.

[Rob Rose] You know, your career
has been a series of successes.

- You haven't had too many failures.
- Yes.

How does the Steinhoff failure
rank in your business career?

I mean, was it your
biggest mistake?

It is the biggest mistake
by a country mile, Rob.

I mean, what it cost
me in monetary terms.

But what it cost also
in reputational terms,

it's by a country mile
the biggest mistake.

How would I explain getting
lured into that trap?

Is I relied too much on
other people's due diligence.

Jooste, for a period of more
than a decade, we now know,

had managed to get through the
internal audit function in Steinhoff.

He managed to get through
the component auditors

in the different jurisdictions
all over the world.

He got through the banks
that lent him billions.

The institutional investors,
the ratings agencies.

You know, until a few
months before the collapse,

Steinhoff still had an
investment-grade rating.

He got through all
those gatekeepers.

Why should I have seen it?

When those people who were there
for years, they never saw it.

Should I have said, "No, no, no.
I don't trust all these auditors.

I want to do my own audit"?

Why did it never happen in 50
years in my other businesses?

There was a long history of
the Steinhoff management team

getting more and more aggressive,
whether in applying accounting policies,

whether in doing tax structuring, whether
in doing merger and acquisition deals.

But at some point, it
doesn't pass the smell test.

No company wants to have liabilities
that negatively affect its bottom line,

and so it will look for
ways of removing them.

They're called off balance sheet
transactions, an accounting loophole

that can be used to enhance the
company's apparent profitability.

In the case of Steinhoff,

it had consumer finance
businesses JD Finance and Capfin.

These companies extended loans to
people who often couldn't afford them,

and so, the risk of
defaulting was high.

Steinhoff decided to sell these companies
to a third party to remove this risk.

However, it actually lent the money to
the third party to finance this purchase

and accounted for the interest
on these loans as revenue.

Steinhoff then reacquired the
profitable segments of the businesses.

It was a deal that didn't
stand up to scrutiny

as it was clearly set up
to exploit a loophole.

At face value, it makes sense to say
no one would enter into a transaction

that they knew,
behind the scenes,

was with a company that had no
substance, that was fraudulent.

I do think, though, that people
sometimes enter transactions

that they know is
quite aggressive.

It pushes the envelope
when it comes to tax rules,

comes to foreign
exchange restrictions,

and therefore that they should
know that there's a risk,

perhaps that some of the deals
are very close to the foul line.

I never could believe that these
figures were coloured. Never.

Our business style was to have top
people and to believe top people.

I never was in these meetings because
the finance department was not my job.

And they always said everything is
okay. I had a shock, a real shock.

[Louis du Preez] You have to
understand why they're so upset,

why they're so frustrated.

And it's not just the
money that they've lost.

There's that personal
self-belief that they've lost,

"But how could I not have seen
this? How did I miss this?

Is there something
wrong in my judgment?"

[Fifi Peters] In all the confusion,
one of the big questions coming out

is how on earth the auditors
signed off on Steinhoff results

for many years, before
everything came to light?

Steinhoff's results were very difficult
to compare with previous years' results.

Steinhoff changed its year end
during the preceding years,

so what it meant was you couldn't really
compare the one year with the other one.

And they also changed the reporting
currency from Rand to Euro.

Which also made
it very difficult

because, you know, which exchange
rate do you use to compare?

Because the sales were made
over a 12-month period.

But at that stage it was definitely
not perceived as being a way to hide,

you know, accounting
irregularities.

Steinhoff is a big company, it's a complex
company, it's got a lot of moving parts.

Maybe it was just a
way to simplify things,

and I think that is how it was perceived
by the media, as well as many analysts.

Auditors perform a public service.
They operate in the public interest.

And often auditors forget that they
are there to protect the public.

They don't work for the
directors of the company.

In fact, they should report
back to the investors

that management is performing
their functions properly.

It's still the responsibility
of the management

to prepare the
financial statements,

and the responsibility
of those with oversight

to exercise their
oversight function

in terms of management's preparation
of those financial statements.

And an audit cannot take
away those responsibilities.

Now, we do know that auditors are also
not responsible for detecting fraud,

but the standards
require that the auditors

do develop procedures to
discover fraud if it does exist.

There was a lot of information in the
public domain that would've alerted me

to ask more questions,

to be sceptical about some of the
alleged shenanigans at Steinhoff.

The fraud standard actually

starts off by explaining that
there are two types of fraud.

It's either misappropriation of assets
or fraudulent financial reporting.

In the case of Steinhoff, it was
allegedly fraudulent financial reporting.

If you'll indulge me, I'll go
through some of the factors

that could have alerted
the auditors to...

potential fraud existing.

"Rapid growth in a business.

The need for additional debt
or additional financing.

The inability to repay debt.

Significant related-party
transactions.

When there's many
year-end adjustments.

Missing evidence, or
altered documents.

- Dominant management or a dominant CEO.
- [seagull calling]

Weak governance structures.
Complex organisational structures.

When there are
schemes to reduce tax.

Unreasonable timeframes
placed on the auditor.

When there is a lot of
complex transactions

when it involves
international operations,

and when there's use of
intermediaries, when doing business."

Deloitte needs to take
responsibility for what happened.

I think they were one
of the key failures

in the oversight
function for Steinhoff.

They screwed up, with any doubt,

and it cost a lot of
people a lot of money.

One of the root causes that
we also discovered was that

the firms had started to allow
their commercial interests

to overtake their
professional responsibilities.

[director] In simple terms,
we're talking about greed?

Yes.

It's quite clear that people
can almost describe Steinhoff

as a massive commercial,
fraudulent conspiracy.

Because the figures would indicate
that, you know, there was very little

in the Steinhoff that I
sold my companies into...

in contradiction of the
published audited accounts.

If someone is meticulous and devious
in the way that they actually hide it,

the one thing that's gonna be very
difficult to protect yourself against

is a deliberate
fraudster and thief.

I think that there's the old
saying, "If good men stay quiet,

that's when evil things happen."

And I think that lots of the
board members, the investors...

In Afrikaans we call it,
they are "skaamkwaad"

they're cross with themselves, but
they also don't want to admit it.

I think it's important that we all put the
facts on the table as we believe they are.

I think one of the first
building blocks of any good scam

is to ensure that you surround
yourself with a core of people

who are going to be your lieutenants,
and Markus did that very well.

It's true, also, that in any
business you must surround yourself

with a core of lieutenants, and there's
nothing wrong with that in principle.

But I think as this thing grew...
Because if you can get away with it once,

you'll get away with it twice, and you
continue to do it as long as you can.

And so this thing snowballed.
And as it snowballed,

the strategy of Markus surrounding
himself with a board and leaders

who were going to accept that we
needed to, almost, commit small crimes

for the greater
good, so to speak.

I'm sure that's how they
explained it to themselves.

All of that points
to an infrastructure

of deceit and fraud,
almost, if you will,

because if that's what comes out, that
it was fraud, then one can now say

that that was how you built up this
infrastructure to realize that.

And the key to that

was keeping those individuals who
know how the system works, close.

There was this
cabal, in a sense.

This closed, Mafia-style,
Stellenbosch-type of grouping,

all connected to each
other, all studied together.

It was in many ways not
different to what apartheid was

in the sense in that it's authoritarian.
You know, you're either in or you're out.

The fact that Steinhoff

became one of the biggest
supporters of rugby in the country.

Another key thing, I mean, he would take
rugby players from the Lions, or wherever,

and he would bring them
straight into the organization.

You know, they would basically
have a straight entry

into an executive position,
and I experienced that.

After years of working,
doing the hard graft,

I suddenly had to report to
some rugby player who came in

and has no business experience.

I realized that my time at
Steinhoff had come to an end

when Markus appointed one
of his Stellenbosch buddies

to head up the unit
that I was working in.

And, you know, we were
supposed to be colleagues

and it was clear that there was
just no respect for me as a person.

I addressed this issue
with Markus in the room.

And it wasn't well received.
And after that, you can imagine

doors started closing and things
just looked completely different.

I had a bit of a...

What shall one call it? A
Damascus moment, in a sense.

Where I broke my ties with Steinhoff,
sold my shares, and I moved on.

When the initial
fallout happened

it was a little bit awkward

for everyone to know,
really, how to deal with it.

In terms of the
racing side of things,

it seemed as though Mr Jooste
was reluctant to withdraw,

but to his credit, he did.

So there was a bit, in my
opinion, of an unseemly scramble

for these horses
to be reallocated.

So they were sold or, you know,
changed ownership sort of overnight

so that they could still run, but it
would be under somebody else's name.

[director] Somebody who obviously
has such a passion for this,

- this must...
- Hurt.

I would imagine it's difficult because
it's you know, it's not just your hobby.

It becomes your social life.
It becomes your business life.

And so, to lose all of that, sort
of overnight, must be pretty tough.

So yeah, I imagine it would've
been a pretty hard blow.

[Alec Hogg] The industry did, certainly in
the initial stages, take a terrible hit.

A lot of that is that the firepower
that Jooste brought to sales

and the way that the money he invested
in the industry lifted all ships.

That firepower has now gone.

And the money that was there

for distribution across many mouths
that were fed, is no longer there.

There is a small
chance that the public

might be able to actually see what
Markus Jooste really looks like.

The Standing Committee on Finance
has taken a draft resolution

today to issue a
summons for Mr Jooste.

Do you swear that the
evidence you are about to give

is the truth, the whole truth,
and nothing but the truth?

I thought it important to share with
the honourable committees here today

the events, and the
sequence of events,

that led to the incidents
of December 2017.

I was only about two meters from
him, and I had an opportunity

to sort of observe him very
carefully during those hearings.

He was quite formidable.

This was not the first time that
he'd had to take tough questions.

And of course, because of his position,
he had superior technical knowledge.

And I got the impression
that he was utterly ruthless.

And I remember thinking,
you know, this man would,

you know, happily
drown a bag of cats.

I would like to take the honourable
committees slightly back.

2007, Steinhoff formed

a joint venture
strategic partnership

with Dr Andreas
Seifert of Austria.

The vision between
Steinhoff and Seifert

was to form a large European
household discount chain

that could compete with IKEA.

Unfortunately it turned out that
Dr Seifert was the wrong person

to go into business with,

and Steinhoff's association with
Seifert was terminated in March 2015.

During 2015, Steinhoff learned

that our ex-strategic
partner, Dr Seifert,

made various statements to
the German tax authorities.

It was Steinhoff's and my view

that Seifert was attempting
to use public prosecutors,

capital market
regulators and the press

to assist him in his unfounded
attempts to obtain information

and to influence the outcome of the
courts in the ongoing civil litigations.

Seifert is the one who is the arch
villain in this particular picture

painted by Markus, and has created
this false picture of a company

that is actually fine, but
which has been unfairly targeted

and smeared, and Markus, as a result,
has been unfairly targeted and smeared.

And my discussion with Dr
Wiese and the legal advisers

was that the supervisory board should
replace Deloitte, at that stage,

with a firm that was prepared to
sign off by the end of January

to meet the deadline.

And I made it very clear that if that is
not the way the board would want to go,

I don't see my way forward.

We know the numbers which
Christo reportedly lost

when the whole group collapsed.

What about you and your family
trust and everything else?

On what day do you want to take the
share price? The day before the collapse?

Don't get now disingenuous.
On the day of the collapse.

Then it is roughly
about R3 billion.

I would imagine that if I was
going to be losing R3 billion,

I would not just up and leave
after 29 years of service,

just on the basis
of one decision.

You literally, with all due respect,
sir, threw your toys out the cot.

I'm not convinced
by that at all.

I went through a
two-and-a-half-year period,

dealing with the issues from when
the German tax investigation started,

the legal fights with Seifert.

And my personal view was

that the start of a new, brand new,
investigation on the 5th of December

will not be completed.

Why will it be completed
quicker than two years

if all the other people
have taken two years?

And therefore, I knew that
the company will be left

in absolute limbo and obviously
pointing fingers at me as the CEO.

And at that stage, that was my
decision, that I had enough.

It was not about losing
money or what was at stake.

[Dr Giada Del Fabbro] What stands
out is he's deflecting blame

and responsibility to
others or other situations.

These are traits we
find quite consistently

in antisocial
personality disorder.

So these individuals also don't appreciate
the consequences of their actions

in a way that would
inhibit their behaviour.

And if you feel confident in
your ability to deflect blame,

then you do feel like
you are untouchable.

That inability to conceptualise
or entertain the idea

that he could be found guilty.

He quite effectively almost
cast himself as a victim.

I didn't buy it.

And I don't think that many
members of the committee bought it.

What Mr Jooste is doing

is to now shift the blame
to the strategic partner.

I'm not sure if Markus
believes what he said entirely

or if it's a narrative he
constructed and is sticking to.

"This is just a grudge by my former
colleague and my peer, Andreas Seifert,

to make me look bad."

Now, that is a story that
doesn't appear to hold water.

The fact is, a forensic audit of
Steinhoff by PWC found 6.5 billion,

R106 billion, of fictitious
transactions over more than a decade.

It's unlikely that a R106 billion
in fictitious deals over ten years

is created by Andreas
Seifert as part of a grudge.

I worked 29 years for this company
every day of my life to build it,

and to travel all over the
world, traveling 200 days a year

into the different
countries of the world.

And therefore it saddened me
what has happened to Steinhoff.

It was a business creating more
than a hundred thousand jobs.

You know, you're coming across

almost like you're a Mother
Teresa of Steinhoff, right?

I can only say that I'm trying my best
this morning to answer the questions

to the best of my ability, and
to the knowledge that I have.

The word scandal is now
the writers of sensation.

Jooste is a very clever, very
slick and a very slippery operator.

You know, he knows where all the bodies
are buried because he buried them.

In fact, he was the undertaker
and he owns the cemetery as well.

So there's no way that
you're gonna catch him out

in divulging the most inner secrets of
his most inner balance sheet, as it were.

He presented a sort of almost a
veneer of respect for the committee.

But I could almost feel

that sort of as he became more
comfortable in the environment,

as he became more confident
in the environment,

that arrogance started to show.

And so I thought that I would put a
question to him that would rattle him.

The bolt from the blue
finally struck on or about

Monday, the 5th
of December 2017.

One of the people who you
once regarded as a friend

apparently referred to you as, and
I quote, "a fucking psychopath,"

presumably because you had lied
to him convincingly for years.

Is it an accurate description
of your personality?

I would like to say
that I never lied

about the activities of the
company as the allegation was made.

Mr Jooste, what surprises
me most about your evidence

is there is no
contrition, no apology...

to the thousands of people,

who you yourself concede
suffered major financial loss.

I think in distancing himself when
working with other people's money,

there was this illusion
that his hands were clean.

For that reason, it might be
hard for him to conceptualize

that he would hold the ultimate
responsibility for that.

[Alec Hogg] You know,
psychologists talk about sociopaths

and sociopaths are predators

and they can see where
your weak spots are.

And they know how to manipulate others
who are close to them and around them

in such a way as they
can gain advantage.

I don't feel sympathetic
towards him at all.

I think Markus knew
exactly what he was doing.

He knew exactly who he was
using and manipulating,

and he hasn't even
tried to say sorry.

One mistake we must not make is to
call these accounting irregularities

or all these other fancy terms

which sanitizes the tragedy and crisis
before us. This is pure corruption.

Because we treat the public
sector with that kind of outlook.

So I'm just saying, it can't be
different strokes for different folks.

That was the bracing reality, I think,
for the country to realize after Steinhoff

that what was happening in the
wider society had infiltrated

other parts of society that people
thought were somehow immune from it.

Fraud and corruption.

No accountability.

Serious allegations.

- State Capture.
- The State Capture Inquiry.

The State Capture Commission.

It cost the economy billions.

The Guptas were benefiting
from government work,

helped by the executive powers
of former president Jacob Zuma.

He's never taken
responsibility for anything.

[Rob Rose] During the Zuma years sort
of after 2011, what we found out,

essentially the country was
being run by a shadow government.

That we had people pulling the strings
from behind the president, Jacob Zuma.

And all of this was essentially
the state capture years.

Until people are caught
they will continue doing it.

For a long time our corporate
sector was lauded internationally.

We had the strongest auditing
standards in the world.

We had the strongest
corporate governance systems.

And then corporate ethics began
to fray too, to some extent.

There are a number of public institutions
and public sector institutions

that were simply hollowed out.

The National Prosecuting Authority
was one of the main sites of capture

during the Jacob Zuma era, which
allowed Markus Jooste to get away

with much more than, you would
argue, he would have gotten away with

had these institutions
functioned.

And afterwards, we've seen a
rash of corporate scandals.

We've seen Tongaat Hulett, we've seen VBS
Mutual Bank and a number of other ones

which indicate that certainly
things were happening in the margin.

And I think that Steinhoff was
the big symbol of that, of how

we lost our way in
the corporate sector.

Because many of these accounting firms
not only aided and abetted state capture,

but aided and
abetted Markus Jooste

to create this fiction of a
multibillion dollar company

which clearly was found on sand.

[Graham Theobald] You can't
get a one-sided corruption.

There's got to be two sides.

The money's got to flow

and it's got to come from somewhere
and it's got to go somewhere.

So trust in our
institutions starts eroding.

And, you know, and
when that happens,

then personal value
systems get compromised.

If Bain & Company
can do it, why can't I?

And how do you correct that?

[Pieter du Toit] It was
multiple systems failure.

You can't pin it on one system that
did not do what it was supposed to do.

It was systems in the private
sector, systems in the public sector,

and in this void
stepped Markus Jooste.

You come in here and you
act like nothing is wrong!

You must be ashamed of yourself!

[Thys du Toit] South Africa needs
resources. It needs savings.

And if South Africa
is defrauded,

be it by the Guptas, be it by Jooste,
you're depleting that savings base,

that very necessary capital.

Employment is not created by
the State. Employment is created

by creating an environment for
entrepreneurs to flourish in.

And if the savings base of
South Africa is depleted

then the capital available to
people that create jobs disappear.

And that's basically what the Guptas did
in a big, big way with state capture.

And that is what Jooste
did with Steinhoff.

And as a result, the
entire population suffers.

One typically points the
finger at the politicians.

But here is a clear case of where
the private sector is also at blame.

You know, people will
learn a lesson from this.

And a few years from now,

bet your bottom dollar
you run the risk again.

I mean, Steinhoff was scarcely
cold when Tongaat happened.

And the rest! It
will happen again.

It's amazing that you say that, because
people talk about how we must stop this

and bulletproof it from happening again.
But you don't think it's possible?

Well, why didn't they stop
it after Enron and Madoff?

[Bernard Agulhas] We have fragmented
regulation in South Africa at the moment.

That means that only
auditors are regulated.

Only auditors are held to
account for an audit failure.

Audit committee members, board members...
You can take away their designations,

but you can't stop them from
carrying on and doing the same work,

whereas an auditor's
license can be withdrawn.

That is because there's an
act that regulates auditors.

The other portions of the financial
reporting chain, or the ecosystem,

is not regulated.

What applies to the auditors
should also apply to them.

All those role players should
be subject to regulation.

They should also
be held to account

in the same way that an auditor's
license can be taken away from them.

And we don't have
that at the moment.

I think everyone in the end ended
up in a good position, not ideal.

And that's probably the hallmarks
of any settlement, ultimately.

Everyone is a little
bit frustrated,

which means it's probably
a good settlement.

The settlement was... [chuckles]
Relative to the damage that was done,

I think they got off lightly.

But it was in the shareholders'
interest to some extent that...

they salvage the company.

Because if the settlement
were significantly bigger,

they would've had to close Steinhoff,
and that would've been a bigger problem.

Maybe there would've
been job losses.

[Jean Pierre Verster] Yes, I do think
Steinhoff is on a path to recovery.

It's gonna be a bumpy path.

There was definitely a probability
that Steinhoff would be liquidated.

It would cease to exist,

and equity holders would lose all
their investments if that had happened.

Debt holders would lose a large
chunk of their investment.

So the new management
team that was brought in

to sort of mop up the problems
has done a great job to do that.

[Louis du Preez] We've changed
the business model significantly.

In some instances by
necessity, in others by design.

Look, we're not out
of the woods yet.

We believe everyone and anyone who
has a share in this company today

will have all the
information at their disposal

to make an informed decision if they want
to hold or sell or buy into the company.

And I think the share price is
definitely recovered somewhat.

It's definitely not at the levels
that it was in December 2017.

But that's now behind us.

[Thys du Toit] It is essential
that Steinhoff survives

because obviously they are one of
the main claimants against Jooste

and so it's essential that they survive
for that court case to go ahead.

What makes me more despondent is the
fact that there's so little progress

from the National
Prosecuting Authority's side.

[sirens wailing]

I don't believe the Hawks have
started their investigation yet.

Does the NPA have the capacity to
successfully prosecute billionaires

who are going to be going to
court, if they do end up in court,

backed up by teams of legal
experts? I don't know!

If you steal R100
000, you go to jail.

If you basically defraud a company of
R100 billion, you don't go to jail.

If Markus Jooste and his accomplices
were in fact prosecuted and convicted,

that would be a significant deterrence
to commercial crime in South Africa.

He's no closer to the inside of a jail
cell today as he was in December 2017.

This thing about
white collar crime

of being treated differently from
other kinds of crime is unacceptable.

[Twitter whistle]

[Twitter whistle]

[Twitter whistle]

You see, the evidence is there.

FEDUSA and our biggest union, the
Public Servants Association, the PSA.

We went to their
offices in Stellenbosch.

We collected all the minutes.

We want to give those documents
over to the Hawks and say,

"Guys, you've got the responsibility in
terms of the constitution to prosecute.

Prosecute these people!"
What is the problem?

[reporter3] Is the net closing
in on former Steinhoff CEO?

The regulator found Jooste
complicit in insider trading.

[reporter4] Jooste
warned his driver,

a friend, and a business partner to
dispose of their Steinhoff shares.

[message alert]

[Rob Rose] It took the regulator
a year or two to investigate this.

The regulator, the Financial
Sector Conduct Authority,

slapped the largest fine on anyone
in its history for insider trading.

It was a landmark
fine in their case.

[Fifi Peters] Insider trading can be
explained through a game of blackjack.

If the dealer gives me
a peek of the next card

and only me, not
the other players,

then I have some inside knowledge
that can ensure that I win.

Let's imagine the dealer
was the CEO of a company

with knowledge of
what's about to unfold.

Maybe evidence of fraud
is going to be uncovered,

which will make the
share price plunge.

If the CEO discloses that
information to a third party

before it becomes
public knowledge

and they sell their
shares to avoid losses...

That's insider trading.

It's illegal, and it's
exactly what Markus Jooste did

in November 2017.

The legal system, in being fair,

also allows those who have
money and the resources

to take advantage of it.

To continue over decades

in defending their case,
often on technicalities.

We see many examples of
that here in South Africa.

He was fined more
then R160 million,

and the driver
was fined R18 000.

The driver already
paid his R18 000,

Markus has not paid his
R160-something million,

but he's free, living his
life. Where's justice there?

That is unfair. That's what
we need to end as a country.

It doesn't matter who you are, whether
you're poor or rich, or black and white,

male or female, you should be
able to be treated the same.

It's not helping the country to heal
from a reconciliation point of view.

Because it creates this
tension that we always have.

If we want to create an
equal, or equitable society,

we need to make sure that we are
seen to be treating people equally.

He apparently does knock
around in his Bentley 4x4.

From time to time he's
seen early in the morning

going into a coffee
shop in Hermanus

with a cap drawn over his face, and
scarves, so he's not recognizable.

[Rob Rose] He is something
of a pariah in Hermanus

partly because so many
people in that town

had bought into his vision of Steinhoff
and had lost a lot of money on that.

So the rumours of Markus-spotting
has become a bit of a sport

in places like Stellenbosch and
Cape Town, where people say,

"I saw him at Lanzerac last week." "I
saw him in a restaurant in Cape Town."

But it's got to be
a terrible life.

I know Ingrid, his
wife has stuck by him,

which, given all the
publicity of his affairs,

and the very public nature of those
is in itself quite extraordinary.

There are frequent pictures of the walls
outside his house being painted with

very mean slogans every day, and
having to be repainted the whole time.

[Thys du Toit] I think his circle
of friends have changed a bit,

but he had what I used to
call his praise singers.

His "raasbende" his "imbongi".

He had these people that always
tagged along for freebies

and I'm sure they're all still
frequenting him, and they see him often.

I haven't seen him. I often wonder
what I would do if I do see him.

But let me not elaborate.

[Rob Rose] Did Markus
apologize to you personally?

No.

If you were to see Markus just walking
here today, what would you say to him?

- I should say, "Markus, fuck off."
- [both laughing]

[director] If Markus was sitting in front
of you, what would you like to ask him?

"Are you okay?" And
I hope that he is.

I'll ask him, ' "Why?"

And, "How did you think you could get
through it, you know, ad infinitum?"

And then, being a little bit
personal, "Why did you target me?"

This isn't a normal person.

You've got to be an artist,

knowing every button to
push with every person.

[Dr Giada Del Fabbro] Money and
status does not change people.

For the large part,
they are who they are.

And then, the way in which that money
and status is expressed or used,

is a reflection
of their morality.

You know, you don't find people
suddenly becoming corrupt

when they have a lot of money.

It's really a trajectory,
where, from early on,

their internal world has
been formed in the way

that they are entitled
to get what they need,

even if that means hurting
other people, breaking a law.

Whatever he's got, he should hand it
over because it was ill-gotten gains.

He needs to pay the price.

The evidence is
just so overwhelming

and the cost to
society is so huge,

that to continue denying it, you're
only doing it for one reason,

and that is for
self-preservation.

I speak to the
police and ask them.

They said they're very
confident they're...

gonna get this
case in court soon.

But I mean, "soon" for the police
might be in six months' time.

But I am definitely checking up on
them constantly. I'm not giving up.

I'm sure he'll go to jail.

It's so glaringly obvious.

I'm sure that he has
a million reasons

how, why, and what he
did and why he did it.

If he wants to be the macho Afrikaner
that he claims to be, then be that man.

Stand up and have integrity.

Admit to the world what you did, face the
consequences of that, and let us move on.

But otherwise, Markus
is just a gangster.

He's just a street thug
as far as I'm concerned.