Markus Jooste's Hefty Earnings and FSCA Fines Amidst Steinhoff Scandal

Markus Jooste, the former chief executive officer of South-African based Steinhoff International, had accumulated earnings exceeding R650 million over a span of four years, leading up to his resignation amid scandal in December 2017. This week, the Financial Sector Conduct Authority (FSCA) penalized Jooste nearly R500 million for infractions under the Financial Markets Act (FMA), punishments that were sustained by the Financial Services Tribunal.

The substantial fine, totaling R475 million, reflects Jooste's role in the manipulation of financial reports, which included the establishment of transactions devoid of economic validity. Specifically, Jooste is accused of overstating Steinhoff UK’s operation profits by around R5.5 billion by disguising uncollectable receivables and fictitious cash equivalents, as well as inflating its Goodwill by approximately R5.2 billion without justification through cash flow or external transactions.

In response to the sanctions, Jooste participated in interviews with the FSCA, where it was reported that his replies often fell short of adequately addressing the questions posed by the authority. Despite his involvement in these formal proceedings, shocking news surfaced this week of Jooste's alleged suicide at Kwaaiwater Beach in Hermanus.

Jooste’s ostentatious compensation included earnings of R243.3 million in his final year as CEO, distinguishing him among the world's top earners. The scrutiny over these large sums comes in the wake of the FSCA's determination to recoup costs associated with the investigation through a combination of administrative penalties and interests.