Original subtitles

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 &ampamp; 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.