South African News

South African Billionaire CEO Markus Jooste Shoots Self In The Head After Getting Fined For Fraud

South African billionaire and former Steinhoff CEO, Markus Jooste reportedly shot himself in the head on Thursday as the net was closing in on him on fraud allegations.

In a statement, Western Cape police said the incident happened at around 2.40 pm.

“Police were activated to attend to a shooting incident at Kwaaiwater Beach in Hermanus. The deceased succumbed to a fatal gunshot wound to the head shortly after arrival at a private hospital,” said police.

An inquest docket has been opened with Hermanus police.

Jooste’s alleged suicide comes after the Financial Sector Conduct Authority (FSCA) on Wednesday hit him with a R475m administrative penalty for contraventions of the Financial Markets Act (FMA) related to his reporting on the financial position of Steinhoff International.

This follows a previous finding by the FSCA that Jooste contravened the FMA and faced a penalty of R20m in terms of the Financial Sector Act. The FSCA’s finding and penalty imposed was upheld by the Financial Services Tribunal.

“The FSCA has decided to impose an administrative penalty of R475m that includes a contribution of R10m to reimburse the FSCA for reasonable costs incurred in connection with the investigation of the contravention and interest on the amount of R475m at the rate of 11.75% calculated from the date of this order to the date of payment, both days inclusive,” the penalty order read.

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The extent of the dishonesty and manipulation of the financial results of Steinhoff International between 2014 and 2017 and of how its financial position was reported meant the publications did not fairly represent its financial position.

“They were false, deceptive and misleading. The publications failed to provide useful financial information to investors, lenders and other creditors.

“They provided false information about the cash balances on hand and false information to assess the prospects of future net cash flows arising from ordinary retail operations,” the FSCA said.

The financial results were deceptive in the extreme and misled the market into believing Steinhoff International was more profitable, more cash positive and more resourced than was the case.

“These were material misstatements that led to existing and potential investors, lenders and other creditors having false or misleading information with which to assess the prospects for future net cash inflows and consequently overvaluing Steinhoff International’s performance and/or the recoverability of their investment or loan,” it said.

The FSCA said the 11.75% interest was prescribed by the minister of finance in November 2023 in terms of the Prescribed Rate of Interest Act.

“The penalties are payable to the FSCA within 30 days from the date of this order. Failure to comply with this order and notice will result in the provisions of section 170 of the Financial Sector Act being invoked, which provides [an] order, on being filed, has the effect of a civil judgment and may be enforced as if lawfully given in that court,” it said.

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