Markus Jooste, a horse racing fanatic and former CEO of Steinhoff International, was very involved in Phumelela – the company that controls horse racing in South Africa. In 2018, South Africa’s horse racing industry was jolted out of its astonishing complacency after the exposure of Jooste – its largest patron – as an industrial scale fraudster. In a webinar hosted by BizNews founder, Alec Hogg, he recently interviewed Brian Riley, the acting Chairman of the Racing Association and member of the Racing Restructuring Task Team (RTT) and Racing Association director Charles Savage. The topic of Jooste’s fraudulent conduct and impact on the racing industry could not be avoided, as is evident in the extract from the webinar in this article published below. Hogg, referring to the Steinhoff share price graph at the bottom of this article, notes that in December 2017 – both Steinhoff and Phumelela blew up and that these parallels are obvious to anyone sitting on the outside. – Nadya Swart
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By Nadya Swart
South Africa’s Phumelela Gaming and Leisure filed for business rescue in May after the devastating impact of Covid-19 and the national lockdown on the horse-racing industry. Former Steinhoff International CEO Markus Jooste was a director and among the largest shareholders of Phumelela before Jooste’s malfeasance burst into the open in December 2017. At that time Deloitte refused to sign the 2017 accounts and Jooste resigned as CEO of Steinhoff International, later admitting to his close colleagues that he had made some “big mistakes”.
After his resignation, Steinhoff filings showed that Jooste had overseen a complex series of transactions where decisions made by the South African retailer benefited him personally. By channelling hundreds of millions of his ill-gotten gains into the horse-racing industry, Jooste and his cronies secured an increasingly powerful position since becoming involved more than two decades ago.
Read also: The Steinhoff scandal unpacked: MUST READ five-part series in one place
Phumelela’s share price suffered as a result of the collapse of the Steinhoff share price. Jooste’s horse management company – Mayfair Speculators – was the second biggest shareholder in Phumelela through an entity called Kalamojo Trading & Investments, and any company associated with Steinhoff risked a tarnished reputation due to the scandal.Â
Disgraced Jooste, one of South Africa’s highest profile crooks, was known for his horse racing fanaticism and – through Mayfair – owned one of the largest stable of thoroughbreds in South Africa. Jooste, who was the owner for a decade and a partner with Coolmore and others with expensive bloodstock interests on four continents, sold two-time South African Horse of the Year Legal Eagle in December 2017 soon after the Steinhoff debacle caused Jooste to abandon ship.
Jooste’s passion for horse racing started when he was just a young boy. His dream was to follow people he looked up to in that part of his life, the racehorse owners like Harry Oppenheimer, Laurie Jaffee and so on.Â
In December 2017, he told BizNews founder Alec Hogg in an interview: “When financial success came, I was able to afford to own a horse and that’s where the luck came in. My first racehorse was National Emblem who became a champion and a successful stallion. Since then I reinvested everything that came out of his stud career so today it’s a big business in my private family affairs. I’ve never bet and that is perhaps the difference – I participate in it as a sport. I’m very fortunate that today, I have race horses all over the world and a wonderful partnership with John Magnier of Coolmore now where they’ve allowed me into their fascinating world”.
Read also: Meet Markus Jooste: Our in-depth interview with former Steinhoff CEO
In March 2018, after Steinhoff shares crashed, twenty-three racehorses in Jooste’s stable were sold in Cape Town. In July 2018, the Public Servants Association (PSA) sent letters to both race sponsor Vodacom and the National Horse Racing Authority (NHRA) demanding that Markus Jooste’s horses not be allowed to take part in the Durban July. The PSA’s demands were met as they received assurances from the NHRA that Jooste’s horses would not participate in the event.Â
While the question of when Jooste will finally face jail time is a burning issue for most South Africans, Brian Riley expresses quite a different attitude towards the entire issue. Instead of focusing on the problems that played a part in Phumelela’s downfall, Riley prefers to focus on the future and what can be done to effect change in the horse racing industry.
