Steinheist strikes back

Showmax’s new Steinheist episodes shed more light on Steinhoff CEO Markus Jooste’s fraud and how the net tightened around him.

In September 2022, Showmax launched the first Steinheist episodes. This documentary delved into Steinhoff and the biggest corporate scandal in South African history.

Steinhoff was founded in 1964 by Bruno Steinhoff. Its core operation was acquiring furniture from Eastern Europe and selling it at a premium in Western Europe.

The company enjoyed great success, and it acquired 35% of the South African-based furniture company Gommagomma in 1997.

Steinhoff and Gommagomma merged in 1998, after which Steinhoff’s headquarters was moved to South Africa, taking full advantage of the country’s low production costs.

Steinhoff went on an aggressive acquisition spree, including a 92.34% stake in Pepkor for R62.8 billion and an 87.21% shareholding in JD Group.

The retailer also acquired offshore companies, including US-based Mattress Firm and numerous European businesses.

The acquisitions significantly impacted the company’s debt. However, former CEO Markus Jooste dismissed these concerns.

He explained that Steinhoff views debt differently from the rating agencies because the cost of financing was so low.

Steinhoff hit its targets year after year, and its share price experienced incredible growth. It was a darling on the JSE and most analysts sang Jooste’s praises.

If you bought Steinhoff shares at the beginning of 2000 and held it until 2016 – at its peak – you would have achieved an annualised return of 18.85%.

However, in 2017, news broke of major accounting irregularities in Steinhoff’s financial statements, and everything came crashing down.

The share price plummeted, and in 2019, Steinhoff’s liabilities exceeded its assets, making it technically insolvent.

Steinhoff International’s 60 years in business ended in October 2023 after the company was delisted and liquidated. It was sold for spare parts, and the money went to creditors.

All Steinhoff shareholders essentially lost their shares and did not receive any payment or distribution for the shares they held.

New Steinheist episodes

Showmax’s 2022 Steinheist documentary delved into the fraud and mismanagement at Steinheist under its chief executive, Markus Jooste.

The first edition examined how Jooste pulled off the scam of the century and what happened over the years.

Since the initial release, there have been big developments in the ongoing Steinhoff saga, including the suicide of Markus Jooste.

Showmax has launched two new Steinheist episodes, which show how the net tightened around Jooste in the build-up to his death on 21 March 2024.

Episodes 4 and 5 pick up the story a month after the documentary series’ initial 2022 release, when the Reserve Bank froze R1.4 billion of Jooste’s assets.

The SA Reserve Bank’s action was followed by his 20-year ban and R15 million fine from the Johannesburg Stock Exchange (JSE).

He then received a record R475 million fine from South Africa’s Financial Sector Conduct Authority (FSCA).

Police also hit Jooste with a summons to stand trial, and there was the seizure of R60 million of assets from Berdine Odendaal, his alleged mistress.

The new episodes also explore the ongoing attempts to recover the money and bring Jooste’s accomplices to justice.

These attempts included insider trading prosecutions in South Africa and fraud convictions in Germany.

It also includes the arrest of former Steinhoff executive Stéhan Grobler and the sentencing and plea deal of Ben la Grange, Steinhoff’s former chief financial officer. 

“The new episodes show that the wheels of justice do turn, even if a lot more slowly than we’d like,” said director Richard Finn Gregory.

“We had a rough time during the state capture years when South Africans started to lose faith that our country could prosecute crimes and make a dent in corruption.”

The new Steinheist episodes show that South Africa’s public institutions have teeth and can prosecute, eventually.

Gregory believes the new Steinheist episodes will give audiences a sense of clarity and closure.

This article was first published by Daily Investor and is reproduced with permission.