How Reserve Bank facilitated Jooste’s operation

Startling details contained in a docket registered to the Hawks’ Serious Commercial Crime unit shine a light on some alleged backroom dealings apparently aimed at paving the way for the questionable facilitation of billions of Steinhoff rands out of the country – with the SA Reserve Bank’s approval. This despite the fact that SARB had serious suspicions that Steinhoff may have contravened a list of exchange control legislation. The Daily Maverick reports that SARB’s acutely embarrassing dilemma of the divisional head of its Financial Surveillance department, Raymond Paola, had been kept airtight for nearly three years. Neither formal nor informal questions posed nor a PAIA application could move SARB representatives to pull back the blanket from the Paola case. However, Scorpio has collected a number of documents and background information in an attempt to build the puzzle. Netted during SARB investigators’ preliminary probe was Steinhoff’s risk manager, Chris Grové, another former SARB employee. Documents suggest Grové was the point man between Steinhoff and SARB who worked closely with Paola. Grové is said to have spilled the beans on Paola during an interview with SARB investigators when he revealed that former company CEO Markus Jooste allegedly fed the bank’s watchman with horse racing tips. The internal net was cast even wider, causing SARB investigators to unearth evidence suggesting 16 exchange control applications – in which Steinhoff asked permission to engage in billions of rands in offshore transactions – had in fact contravened a litany of the bank’s rules governing cross-border transactions. Paola is said to have signed off on all 16 flagged applications between 2012 and 2017. This includes the period Steinhoff set up operations in Germany and the Netherlands. SARB consequently slapped Paola with internal disciplinary charges. These relate to gross dishonesty, a conflict of interest, the abuse of confidential information, soliciting gifts and the failure to declare them. Paola, who has worked at SARB more than half his life, for 33 years, resigned in June 2021 before the disciplinary hearing could be concluded.

Paola, through his lawyer, declined to answer detailed questions. He claimed that ‘many of (Scorpio’s) questions are not in context, are one-sided and do not reflect a proper understanding. (Paola) is also bound by confidentiality in accordance with his terms and conditions of employment’. SARB registered the complaint against Paola, Grové and Jooste in 2022 with the Hawks in terms of SA’s corruption legislation. The unit’s Specialised Commercial Crime unit is supposedly investigating the matter, Hawks spokesperson Katlego Mogale confirmed. She declined to confirm the suspects listed in the case. Grové said he has not been informed of the possible corruption charges against him and authorities have not recently questioned him on this or other Steinhoff matters. Between 2015 and 2017, Jooste sent Paola horse racing tips for the Durban July – twice through Grové and once through Jooste’s personal assistant. These were emailed to Paola, SARB claims. DM notes that Part Two of the expose will focus on the deals linked to the 16 exchange control applications Paola is said to have signed off on.