The former chief executive of Steinhoff, Markus Jooste. Picture Armand Hough/African News Agency (ANA)
Financial Sector Conduct Authority (FSCA) on Wednesday said it had issued a much reduced revised penalty of R20 million to disgraced former Steinhoff CEO Markus Jooste for insider trading.
On October 29, 2020, the FSCA imposed an administrative penalty of R161.6m on Jooste for breaches of the Financial Markets Act.
However, it said the revised penalty was in line with the Financial Sector Tribunal’s decision on insider trading regarding Steinhoff International Holdings.
The FSCA said R1m of this penalty had been levied for encouraging Jaap du Toit to sell his Steinhoff shares.
“Notwithstanding the disclosure and encouragement, Mr Du Toit never acted on the contents of the warning SMS. The provision prohibits an insider from encouraging or discouraging another person to deal in securities which the inside information relates to,” it said.
The Financial Sector Tribunal, on December 13, 2021, set the FSCA’s administrative penalty aside and referred the determination of an appropriate administrative penalty to the FSCA for consideration.
“The Tribunal concluded that Mr Jooste did not contravene section 78 (4) (a) of the Financial Markets Act as the information he provided in the warning SMS sent to Mr Jaap du Toit, Dr Gerhardus Burger, Mr Marthinus Swiegelaar and the late Mr Ockert Oosthuizen to encourage them to sell their Steinhoff shares, was vague and imprecise. Section 78 (4) (a) prohibits an insider from disclosing inside information to another person,” it said.
The Tribunal had advised the FSCA to consider alternative dates to calculate the losses avoided by the trades of Burger and Oosthuizen.
In arriving at the amount of the new administrative penalty, and in line with the decision of the Tribunal, the FSCA said it had considered, amongst other factors, the amounts of the losses avoided by the recipients of the warning SMS as a result of the offending transactions, Jooste’s level of cooperation during the investigation, the seriousness of the breaches, the need to deter such conduct as well as Jooste’s submissions regarding the merits of the case against him including his submissions regarding an appropriate penalty.
The penalty was payable on or before January 6.
In November, it was reported that Jooste would soon have his day in court.
This comes after the Oldenburg regional court in Germany said four people would go on trial over charges of accounting fraud.
Jooste is suspected of contravening foreign exchange regulations that saw investors lose more than R200 billion.
Earlier this year, the South African Reserve Bank attached assets belonging to Jooste worth millions of rands.
Jooste is the alleged ringleader in a financial fraud that saw investors lose more than R200 billion and resulted in the 95% collapse of the share price in 2017.
BUSINESS REPORT