Rédaction Africa Links 24 with Neesa Moodley
Published on 2024-03-21 22:35:39
In a media briefing on Wednesday, it was announced that a criminal case involving the contravention of sections 81A and B of the Financial Markets Act (FMA) would be added to a larger National Prosecuting Authority (NPA) fraud investigation. This development occurred the day before Markus Jooste’s alleged suicide. Alex Pascoe, the head of market abuse at the Financial Sector Conduct Authority (FSCA), revealed that the findings would be shared with various regulatory bodies such as the JSE, South African Reserve Bank, Irba (Independent Regulatory Board for Auditors), and Saica (South African Institute of Chartered Accountants).
Pascoe also addressed the likelihood of the administrative penalty being paid. He explained that if the fine remains unpaid, it would become a debt to the FSCA, which could then use civil execution methods to recover the amount. Dirk Schreiber, Steinhoff’s former European finance chief, was mentioned in relation to a leniency agreement he received, which included strict terms and conditions. Given Jooste’s history of successfully appealing fines, the FSCA anticipated that he would challenge the R475-million penalty in an effort to reduce it.
Jooste’s intention to bring the matter to the Constitutional Court was revealed, with Pascoe predicting a prolonged legal battle involving litigation stalling strategies. The FSCA’s investigation focused on elements such as cash and cash equivalents and goodwill, covering approximately R38 billion in restatements. The findings indicated how false income reporting impacted various financial aspects, including cost of sales, profitability, and cash positions.
The FSCA intended to pursue a criminal case for contravening the Financial Markets Act, which could result in a penalty of R50 million or 10 years’ imprisonment. FSCA Commissioner Unathi Kamlana explained the rationale behind the R475 million administrative fine, emphasizing the need for proportionality and fairness in imposing penalties for fraud. He highlighted that the administrative penalty was not the sole repercussion for fraudulent activities, as law enforcement agencies were handling a criminal investigation.
The FSCA’s actions were part of a comprehensive effort to address financial misconduct and ensure accountability. Kamlana stressed the importance of considering all consequences, both regulatory and legal, to uphold market integrity and investor protection. The gravity of the situation was reflected in the potential penalties and legal actions awaiting individuals involved in fraudulent activities.
Overall, the media briefing shed light on the ongoing investigations and legal proceedings surrounding Steinhoff’s financial irregularities, underscoring the commitment to holding accountable those responsible for misleading statements and fraudulent practices.
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