Markus Jooste's estate goes into sequestration with a R475 million fine still unpaid

The estate of Markus Jooste has been placed in provisional sequestration, opening the way for trustees to trace what remains of the fortune the former Steinhoff chief executive left behind.

Once provisional trustees are appointed they can begin that work, more than two years after Jooste shot himself at Kwaaiwater Beach in Hermanus on March 21, 2024, aged 63.

He died the day after the Financial Sector Conduct Authority imposed a R475 million administrative penalty on him, about $29.2 million at R16.25 to the dollar and the largest the regulator has ever levied on an individual. The penalty fell due within 30 days. It has never been paid.

The FSCA confirmed in May that the amount remained outstanding and had not been settled by the estate, by family trusts or by any third party, and that it was pursuing recovery through the courts.

The regulator found that Jooste and Dirk Schreiber, finance director of Steinhoff Europe, had contravened sections 81(1)(a) and (b) of the Financial Markets Act by making or publishing false, misleading and deceptive statements and omitting material facts from Steinhoff's financial statements and annual reports covering 2014 to 2016 and the first half of 2017. Its judgment identified Jooste as the mastermind and noted that his salary over that period exceeded R710 million, about $43.7 million, inflated by the very numbers it found to be false.

Schreiber cooperated with the investigation and received no penalty under a statutory leniency agreement.

Steinhoff's market value fell 91 percent in December 2017 after the accounting irregularities emerged, wiping out pension savings and destroying what had been one of the largest companies on the Johannesburg Stock Exchange. Christo Wiese, who had merged Pepkor into Steinhoff in 2015 and become its largest shareholder, lost most of his fortune and fell off the Forbes list of Africa's billionaires entirely.

What creditors will find is uncertain. Jooste's will, drawn up in 2020, left his wife Ingrid three firearms, eight vehicles, artworks, two insurance policies, a retirement annuity and just under R74,000, about $4,550, in cash. Jan Pretorius of Perpetual Fiduciary Services, the executor, declared the estate solvent while naming three creditors whose claims he recorded as in dispute: the Johannesburg Stock Exchange, the South African Revenue Service and the FSCA.

Much of what he held had already been frozen. The South African Reserve Bank obtained a High Court order in October 2022 attaching assets belonging to Jooste personally, to the Silveroak Trust, formerly the Markus Jooste Kindertrust, and to Lanzerac Estate Investments, on suspicion of exchange control contraventions the bank put at R4.836 billion, roughly $297.6 million. The attachments covered art worth R98.8 million ($6.1 million), other financial assets of R1.21 billion ($74.5 million), loans receivable of R131.1 million ($8.1 million), jewellery, paintings and firearms worth R795,400 ($48,900), movable goods at his Hermanus home and the Lanzerac wine farm in Stellenbosch, and five vehicles including a Mercedes-Benz SL600.

Deputy Governor Fundi Tshazibana published the forfeiture notice in the Government Gazette on Oct. 15 last year.

Trusts complicate the picture further. Assets held in trust do not form part of an insolvent estate and cannot ordinarily be attached by creditors, though courts can pierce that protection in limited circumstances. The Markus Jooste Kinder Trust was registered in 1990, long before the fraud, and its trustees include his son Michael.

The JSE fined Jooste R15 million, about $923,000, in January 2023 over false and misleading financial statements and a sham R376 million ($23.1 million) invoice. He was contesting it when he died.

Enforcement against others has continued. The Reserve Bank seized R42 million ($2.6 million) in cash and an R18 million ($1.1 million) property at Val de Vie in Paarl from Berdine Odendaal, described in court papers as Jooste's former partner, over claims she gained more than R60.5 million ($3.7 million) from Mayfair Speculators, his racehorse company. The FSCA imposed a R358.75 million ($22.1 million) penalty on former Steinhoff director Stéhan Grobler in March, which he has not paid and has asked the Financial Services Tribunal to reconsider.

Steinhoff International was liquidated on Oct. 13, 2023. About R6 billion, some $369.2 million, held across seven local accounts by successor entities was forfeited to the state in July 2024.

Lanzerac, the Stellenbosch wine estate Jooste once owned, was sold to Wiese and is now challenging the Reserve Bank over a R220 million ($13.5 million) forfeiture order.