Markus Jooste: High life, big fall

How the man behind SA’s largest corporate scandal is less than beloved by his neighbours after refusing to let them pass by his seaside plot.

Once upon a time, Markus Jooste could have solved any problem.

And there were many: the eyesore created by a dilapidated restaurant he had to drive past on the way to one of his holiday homes; the annoying people who wanted to walk on the beach path that went past his house in Hermanus in the Western Cape; the constant flights to different countries in Europe every couple of days so he could expand his business empire to sell furniture and clothes to “poor” people; and his racehorses that would later win the Durban July.

For all these problems, the “very sorry” former head of Steinhoff had a solution. But no more.

This week, Jooste became the face of what has been called the largest corporate scandal to ever hit South Africa.

He was forced to resign as chief executive officer (CEO) of the company he founded, furniture retailer Steinhoff International, one of the 15 largest companies on the JSE. In two days, the company lost R194bn of its value after German investigators began probing the company for accounting fraud.

South African government employees sustained heavy pension losses. The Public Investment Corporation’s almost 9% stake in Steinhoff plummeted in value this week to R3.6bn – more than R16bn less than it was worth two weeks ago.

Jooste – a chartered accountant whose company employed 132 000 people in 32 countries – sent a personal letter of apology to staff in which he admitted that he made some “big mistakes”.

German business publication Manager Magazin reported in August that a two-year investigation by German authorities found “that excessive revenues have been included in the balance sheets of companies belonging to the group”.

Magda Wierzycka, the CEO of Sygnia Asset Management, reportedly said it was “as close to a corporate-structured Ponzi scheme as one can get”.

Jooste owns racehorses around the world, including the champion horse, Variety Club.

His racehorse, The Conglomerate, which he bought for R1.6m in Australia, won last year’s Durban July.

In an interview with Alec Hogg on Biznews, Jooste once said: “If I come into a hotel room at 11 at night, fire up my iPad and watch my horses racing all over the world, that’s when I relax.”

Holiday compound: Markus Jooste’s other house in Hermanus, which he bought from the Rupert family. Picture: Edrea du Toit.

Jooste also has a holiday home in Voëlklip which he bought from the Rupert family. It fills almost an entire street block and has two separate entrances in two streets. One is supposedly for him, his wife Ingrid and their three children, while the other is for guests.

“Vulgar” and “like a compound” is how some of Voëlklip’s residents described the home, located two blocks from the ocean, to City Press’ sister newspaper, Rapport.

Next to the road that Jooste would have travelled along to his holiday home, from his farm outside Stellenbosch called Mount Happy, or his business’ luxury estate, Lanzerac, was an old restaurant with graffiti on its walls. Jooste bought the property, on prime land worth millions of rands, and sent in a bulldozer to knock it down. Then he erected a palisade fence to keep the homeless people out.

“It was a bit of an eyesore for everyone,” said one of the residents. The lawn on the site is still mown regularly, they said.

In the meantime, Jooste has designed and begun building another dream house right next to the sea in Hermanus. But even at this early stage, there is trouble with the neighbours.

On the rocks: the plot in Hermanus where Steinhoff CEO Markus Jooste was building another dream holiday home. Building was halted this week

The Hermanus Cliff Path Action Group seeks to bring two stretches of a cliff path together so that people do not have to walk on the main road to reach one path from the other. The cliff path stretches for 12km along the Hermanus coastline, but is blocked by, among other things, Jooste’s property, where he is building right on the shorefront.

The action group’s Advocate Johan de Waal said 10 owners of these properties refuse to allow the path to run past their houses, built on properties which are laid out right up to the high water mark.

“If you want to walk past their houses, they wave you away with their hands,” said De Waal.

READ: A Steinhoff guide for dummies

Jooste’s property, in the East Cliff neighbourhood, is the closest to the path on the town side. Jooste owns the property through his company, Mayfair Speculators, which he established in 1987 and through which he manages many of his personal affairs – including his racehorses.

De Waal said one of the conditions of the subdivision, before Jooste bought the property, was that a set-back line of 20 metres would be respected.

Jooste, however, did not abide by the agreement, said De Waal.

Cormac Cullinan, an attorney who handled the matter for Mayfair and who has never met Jooste, said his client was opposed to the idea of a footpath on his property. They were not, however, aware of the condition of the subdivision and are currently obtaining legal advice about it.

But Jooste’s dream appears to be on the rocks anyway.

A pile of bricks, an empty, temporary site office and deep holes in the ground were all there was to see at the building site this week. The contractor told Huffington Post that they were instructed to stop building.

Gone are the shovels and trucks that have drowned out the peaceful sound of the surf over the past few weeks. First the trees were cut down and then boulders were removed from underground.

“How anybody thought you could build on such rough terrain is beyond comprehension,” said one resident, who lives nearby and did not want to be named.

Jooste was nowhere to be found this past week.

At Steinhoff’s offices in Stellenbosch, staff could be seen scurrying to and fro, attending one conference after another.

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