End of the road for disgraced businessmen

The deaths of convicted German fraudster Jurgen Harksen and disgraced South African businessman Markus Jooste have closed the chapter on a global network of fraud and mismanagement that saw billions of dollars plundered and thousands of investors scammed. Legalbrief reports that Harksen, who was extradited from SA several years ago, has died after a short illness. He was 63. Harksen swindled investors out of millions and used the funds to live a lavish lifestyle in Cape Town before his arrest. According to the German publication Der Spiegel, his death was confirmed by his lawyer, Gerhard Strate, on Wednesday. In 2003, Harksen was sentenced to several years in prison in Hamburg for fraud. Prior to his arrest and sentencing, he had fled to SA, where he managed to evade justice for almost a decade. News24 reports that he consented to return to Germany in 2002, after a protracted battle against his extradition. He was accused of defrauding at least 70 people out of $17.1m in an investment scam. Harksen was also at the centre of a scandal involving South Africa's official opposition party, the Democratic Alliance (DA). Former DA provincial leader Gerald Morkel was investigated after allegations that he had accepted donations from Harksen. Harksen told the Desai Commission, which was set up to probe the donation, that he had channelled more than $52 000 to the party through Morkel and former Finance MEC Leon Markovitz. Morkel, who died in 2018, denied that he had taken money from Harksen.

SA's Financial Sector Conduct Authority (FSCA) has said its civil investigation into Steinhoff is ongoing, despite former CEO Markus Jooste's death late last week. A BusinessLIVE report notes the FSCA said the $24.9m fine issued on Wednesday before his death will remain in place. Jooste took his life by suicide the day before he was expected to fly to Pretoria and hand himself over to police so that he could appear in court to face criminal charges. The National Prosecuting Authority was ready to charge and prosecute him using top advocates, who usually work privately. The FSCA said it found that he and Steinhoff's former European finance chief, Dirk Schreiber, were responsible for publishing deceptive statements about Steinhoff International's financial position between 2014 and 2017. This meant investors based their decision on false information, which resulted in hundreds of billions of rands in losses, including by pension funds. Jooste resigned from Steinhoff at the end of 2017, triggering a near-collapse that wiped out $10.5bn in pension fund money and other investments as investors realised its financial statements were manipulated.

A business colleague of Jooste's at Steinhoff has appeared in a Pretoria court. After spending the weekend in custody, former Steinhoff legal head Stéhan Grobler will be released on bail if he comes up with $7 800. Fin24 reports that the ruling was made by Pretoria Magistrate Nicca Setshogoe on Monday morning, who said the 64-year-old was not a flight risk. The state asked for bail to be set at $10 500, while Grobler's legal team had asked for $2 600. His bail conditions include that he must hand in his passports and report to the Brooklyn police station regularly. Setshogoe said the decision to award bail was based on Grobler’s history of cooperation with investigations conducted by the National Prosecuting Authority, the FSCA, the Reserve Bank and PwC. Fin24 reports that Grobler on Friday denied the charges, and said in his affidavit which was read in court: 'I was and remain confident that I will be able to clear the charges levelled against me. I have provided my full co-operation to the investigation wherever it has been required of me.' The report notes that Grobler is the first person linked to Steinhoff to appear in court in South Africa. Grobler was the company secretary of Steinhoff International Holdings between 1999 and 2011, the Fin24 report adds.