SAICA announces charges of misconduct against Markus Jooste
The South African Institute of Chartered Accountants (SAICA) has announced that they will be undertaking disciplinary action against disgraced Steinhoff CEO, Markus Jooste. The keen horse breeder left Steinhoff just before the company was embroiled in a financial scandal. The alleged financial fraud that took place was not only investigated by South African authorities, but by forensic auditors at PwC – payed for by Steinhoff. Bloomberg reported that officials showed vert little progress in getting closer to the accounting irregularities within the company. Jooste himself was fined around R162 million by the FSCA for insider trading. The former CEO left many South Africans outraged, as he is yet to face the consequences for his alleged involvement in the inside-trader related events. Among those who lost money is Christo Wiese, who lost a considerable chunk of his vast fortune. However, Jooste may just have to face the music in Germany, where local authorities have charged him for his involvement with accounting violations. – Jarryd Neves
Media Statement
SAICA announces disciplinary proceedings against Mr. Markus Jooste
(SAICA) By-Laws (2020) (Paragraph 17 of Appendix 4) permit the issuing of public statements by the SAICA Chief Executive Officer (CEO) regarding the institution of any complaint or investigation or action against a member once a draft charge sheet or a charge sheet has been issued to such member and such matter, complaint, investigation or action is, in the opinion of the CEO, in the public interest.
In June 2019, SAICA's Board considered Mr. Markus Jooste's resignation from SAICA membership but resolved not to accept his resignation and to suspend his membership pending the finalisation of disciplinary proceedings against him. The Board's decision not to accept Mr. Jooste's resignation and to suspend his membership pending the finalisation of disciplinary proceedings against him was made in terms of SAICA's By-law 32 (2018 version) and was conveyed as such to Mr. Jooste's lawyers.
SAICA hereby informs stakeholders and the public, following an extensive period of investigation, that charges of misconduct have been proffered against Mr. Jooste.
Mr. Jooste is charged as follows:
that he conducted himself in a manner which, in the opinion of the Professional Conduct Committee or the Disciplinary Committee, is discreditable, dishonourable, dishonest, irregular or unworthy, or which is derogatory to the Institute, or tends to bring the profession of accountancy into disrepute; and/or that he failed to maintain and adhere to the fundamental principles in the SAICA Professional Code of Conduct for Chartered Accountants ("the Code), in that:
Charge 1
1.1 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016), in that he committed a breach of his obligations to comply with section 100.1 read with section 100.5, section 110: integrity, section 120: objectivity, section 140: confidentiality and section 150: professional behaviour of the Code; and/or
1.2 Mr. Jooste committed an offence as contemplated in par 34.10 of the By-Laws (21 September 2016), in that he committed a breach of section 100.1 read with section 360: responding to non-compliance with laws and regulations of the code as a chartered accountant he was aware of and yet failed to respond to non-compliance or suspected non-compliance with the Financial Markets Act 19 of 2012; and/or
1.3 Mr. Jooste committed an offence as contemplated in par. 34.12 of the By-Laws (21 September 2016), in that he conducted himself in a manner which is discreditable, dishonourable, dishonest, irregular or unworthy, or which is derogatory to SAICA, or tends to bring the profession of accountancy into disrepute in that he used insider information to deliberately discourage other persons from investing in Steinhoff.
Charge 2:
2.1 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016), in that he committed a breach of section 100.1 read with section 100.5, section 110: integrity, section 120: objectivity, and section 150: professional behaviour of the Code; and/or
2.2 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016), in that he committed a breach of section 100.1 read with section 360: non-compliance with laws and regulations of the Code as a chartered accountant he was aware of and yet failed to respond to non-compliance or suspected non-compliance with section 22 (1) of the Companies Act 71 of 2008; and/or
2.3 Mr. Jooste committed an offence as contemplated in par. 34.12 of the By-Laws (21 September 2016), in that he conducted himself in a manner which is discreditable, dishonourable, dishonest, irregular or unworthy, or which is derogatory to SAICA, or tends to bring the profession of accountancy into disrepute in that he knew or reasonably knew that Steinhoff was facing increased scrutiny from its External Auditor regarding accounting irregularities at the time when Mayfair Speculators had requested further advances from Investec by way of a loan draw down.
Charge 3:
3.1 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-laws (21 September 2016) in that he committed a breach of section 100.1 read with section 100.5, section 110: integrity, section 120: objectivity and section 150: professional behaviour of the Code; and/or
3.2 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016), in that he committed a breach of section 100.1 read with section 360: responding to non-compliance with laws and regulations of the Code as a chartered accountant he was aware of and yet failed to respond to non-compliance or suspected non-compliance with laws and regulations; and/or
3.3 Mr. Jooste committed an offence as contemplated in par. 34.12 of the By-Laws (21 September 2016), in that he conducted himself in a manner which is discreditable, dishonourable, dishonest, irregular or unworthy, or which is derogatory to the Institute, or tends to bring the profession of accountancy into disrepute in resolving, as an executive director of Mayfair Speculators, he approved the distribution of the dividend in specie to Mayfair Holdings despite being aware that the Steinhoff share price was likely to be significantly negatively affected by matters within his knowledge.
Charge 4:
4.1 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016 AND 21 May 2018) in that he committed a breach of section 100.1 read with section 100.5, section 110: integrity, section 120: objectivity, section 130: professional competence and due care, section 140: confidentiality and section 150: professional behaviour of the Code; and/or
4.2 Mr. Jooste committed an offence as contemplated in par. 34.10 of the By-Laws (21 September 2016 AND 21 May 2018), in that he committed a breach of section 100.1 read with section 360 of the Code: responding to non-compliance with the prevailing laws and regulations as a chartered accountant he was or ought to have been aware of and yet failed to disclose various accounting irregularities contained in Steinhoff's annual financial statements and instead he made misrepresentations regarding these accounting irregularities and the existence of proof to disprove the irregularities and to exonerate himself of any wrongdoing; and/or
4.3 Mr. Jooste committed an offence as contemplated in par. 34.12 of the By-Laws (21 September 2016 AND 21 May 2018), in that he conducted himself in a manner which is discreditable, dishonourable, dishonest, irregular or unworthy, or which is derogatory to SAICA, or tends to bring the profession of accountancy into disrepute in that he made material misrepresentations to the Audit Committee of Steinhoff and/or Steinhoff International Holdings Proprietary Limited and to Parliament regarding the allegations of accounting irregularities in the annual financial statements of Steinhoff and/or Steinhoff International Holdings Proprietary Limited.
In terms of the SAICA By-Laws, Mr. Jooste has 21 (twenty-one) days to respond to SAICA regarding the charges referred to above. Once his response to the charges is received, the SAICA secretariat will review the response and table the matter for adjudication before the Professional Conduct Committee.
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