This is an open letter directed at Markus Jooste, the Ex-CEO of Steinhoff international.
We all have heroes, we all have people and public figures we look up to. Some people choose to idolize rich and famous families and people who live in glass towers in places like Los Angeles, who make movies and portray lives that are not their own. They contribute very little to society except for living the high life and feeding off fans who go watch their movies and pay for merchandise. Other people look to comic book characters who poses special super human powers, other look to political figures and others fictional characters portrayed in books and movies.
Me….I look up to business leaders, I look up to men and woman who start something from nothing, and build empires while taking the risks and steering through tough times to emerge as market leaders. You can imagine how the wind got knocked out of my sails when I heard that you resigned as CEO of Steinhoff, and then absolute disbelief when I read the Viceroy report of what was happening at one of the top 10 corporate companies in South Africa.
I am not going to talk about the fact that more than R 12 Billion was wiped from the public pension fund in less than 48 hours, nor will I talk about the off balance sheet companies that was being run on the side, and only losses being written to these companies to ensure that Steinhoff had a strong set of financials. I won’t mention the business that got sold and transferred to other off balance sheet companies, just to be broken up in pieces and then the “profitable” side sold back to Steinhoff, leaving the loan books and bad debt on the side where no one will notice. I will also look over the fact that Steinhoff made big business during this time by handing out unsecured loans to consumers who could not afford it, then when the loan was declared delinquent, you profited while people lost their lively hoods declaring themselves bankrupt, all the while that loan book was sitting in a company that no one knew about, and in your world it didn’t really matter if the debt was repaid or not because you where cashing in on the loan shark business of collecting it. I will ignore the reports on tax evasion and also give a blind eye to the rumours of under depreciation of assets and all the other damning evidence that has been reported in the media.
But I will however focus on what this means for South Africa. This scandal comes at a time when we have just gotten over the whole KPMG debacle where KPMG assisted the thieving government to hide blatant corruption. Just recently big IT giants like EOH got investigated for corruption with government agencies and now I am sure Deloitte will also have its good name smeared with mud for signing off your financials in previous years.
People are now asking questions like “How did we miss this”, “how did no one pick this up”? I will tell you why, because people trusted you. Many years ago when I was doing my Bcom degree I used Steinhoff for projects, and at one stage I tried to deceiver the income statement and balance sheet to do some fundamentals. I could not make head or tails of anything that is in there because nothing added up. After a while I gave up and wrote it off to inexperience. I must say I now feel better about it after finding out that none of the best rated Asset managers in South Africa or abroad really understood what you reported to shareholders. No one really cared, because Markus and Christo was at the helm of the boat. While you were reporting profits, no one blinked an eye. Ironicly, the same scenario played out with Enron & Lehman Bros.
Seeing that you are the “fall guy” for this whole mess (by the way, I find it impossible that you orchestrated this whole thing by yourself, there is no way that Christo Wiese, Ben La Grange and Bruno Steinhoff himself was oblivious to all this), I would like to remind you that people admired you, small business owners and entrepreneurs alike looked up to you and the Steinhoff board with this idea that you can still make it big in this world without resorting to tender fraud and underhanded dealings. That one can still build empires and rule the world with nothing more than street smarts and business acumen. It saddens me to think that the whole idea is a fraud, based on lies and smoke covers.
They say that government steals from public sector, and business steals from the private sector, I guess this saying holds a lot of truth.