The Steinhoff accounting scandal is arguably the worst this country has ever seen.
Markus Jooste, as well as former colleagues Dirk Schreiber and Siegmar Schmidt, were cooking the books as far back as 2014.
Then, in the final two years before the scandal broke, Jooste was accumulating millions with the help of colleague Ben la Grange.
Now Steinhoff looks set to once again make corporate history, filing court papers that will force Jooste and la Grange to “pay back the money”.
Over to BusinessLIVE:
In an unprecedented move it is claiming R870m from former CEO Markus Jooste and an additional R272m from former CFO Ben la Grange (below) for “unjustified enrichment”.
On top of those hefty bills the furniture retailer is demanding interest and legal costs from the two former executives.
Steinhoff is not just going after the incentives and bonuses paid to Jooste and la Grange. In a totally unexpected move, it is also going for their base salaries. The claim against Jooste dates from 2009 to 2015 and against la Grange from 2015 to early 2018.
The company has lodged a summons with the high court which contains the details of the financial damage wreaked by Jooste, with the help of la Grange, in the years leading up to the collapse of the company’s share price.
The 33-page summons fleshes out many of the shocking revelations contained in the 2017 and 2018 annual reports, which were recently released after 18 months of interrogation by an international team of forensic auditors.
The no-nonsense legal document directly links Jooste and La Grange to the widespread fictitious transactions and accounting irregularities that led to R200bn being wiped off Steinhoff’s share value in December 2017.
Steinhoff ostensibly entered into transactions with the Campion/ Fulcrum group, the Talgarth group and the TG group “having little or no economic value and not at arm’s-length”, says the summons. It goes on: “Transactions resulting in apparent profit and loss creation involving the sale and purchase of entities, trademarks, brands, intellectual property, rebates and know-how” were also ostensibly entered into with the same companies.
Steinhoff further state that had they been aware of the “true” facts of what was going on, they would never have awarded bonuses or “award shares” to Jooste and la Grange.
“The defendants [Jooste and la Grange] are accordingly required to repay … all base salaries paid, all bonuses paid, and the then value of the shares so awarded,” says the summons.
Jooste has 10 days to respond to the summons, while la Grange has a month. Jooste confirms that he has received the summons but refuses to comment.
The dramatic legal action is without precedent in SA and marks a significant departure from the corporate tradition of dealing with senior management crises behind closed doors. If successful it would not only result in considerable hardship for Jooste and la Grange but could have widespread consequences for executive remuneration practices.
Tongaat Hulett, for example, is being described as the next Steinhoff, with calls already being made for former CEO Peter Staude to repay several years of bonuses.
Jooste may be able to hide away from the people of Hermanus, but he won’t be able to dodge this summons as easily.
[imagesource:wikicommons] Prince Andrew is reportedly considering writing his autobiogr...
[imagesource:primevideo] Billie has made her acting debut as a cult leader offering a s...
[imagesource:unsplash/peterfoster] A Colombian woman whose husband was murdered, spent ...
[imagesource:aljazeera] A deep-dive investigation by Al Jazeera has revealed some of So...
[imagesource:twitter/@skyferrori] Pope Francis has pretty much set the internet alight ...