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Investment fraud: Understanding the R200Bln Steinhoff-Jooste scandal

marcus jooste

No date has been set for the beginning of the German prosecution of Marcus Jooste for investment fraud, according to a statement released by the regional court of Oldenburg on Thursday, which did not identify the individuals involved.

The trial against two former German-based Steinhoff International Holdings executives will begin on May 3, according to the report, according to Moneyweb.

This is the first time that Marcus Jooste will stand trial for the investment fraud he orchestrated. He has denied the allegations that he was the creator of the accounting fraud that enveloped retailer Steinhoff International Holdings in late 2017. Almost five years have passed since auditors refused to sign off on the company’s financial statements, resulting in a dramatic share price collapse and the initiation of law enforcement agencies and regulatory investigations in both Europe and South Africa.

While German authorities have not yet officially identified any of the suspects, a source familiar with the investigation previously stated that Jooste was one of four individuals charged with accounting crimes in Germany. In a statement released on Thursday, he was identified as the CEO of Steinhoff International Holdings until the end of 2017.

Jooste did not respond immediately to a message sent to his last-known mobile phone number outside of business hours.

Last year, Jooste, two former Steinhoff executives, and a fourth defendant were indicted for committing balance sheet fraud between July 2011 and January 2015. Subsequently, the case was divided in half to avoid delays caused by the coronavirus pandemic.

Later, a long list of overblown profits and asset values surfaced, and the company was forced to sell a variety of international retail assets to raise capital. It agreed earlier this year to begin paying out $1.4 billion to investors who lost money.

The charges allege that some of the group’s units recorded fictitious proceeds from fraudulent transactions. According to investigators, the transactions made it appear as if assets were sold to third parties when, in fact, they were acquired by other companies affiliated with the group.

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Steinhoff International Holdings & Marcus Jooste: blatant investment fraud

Supposedly, artificial transactions manipulated balance sheets by more than 1.5 billion euros. Moreover, the value of real estate assets was inflated by 820 million euros, according to prosecutors. While the charges span from July 2011 to January 2015, the court dismissed one count dating back to July 2011 on the grounds that it was barred by the applicable statute of limitations.

The two German former employees are listed as 63 and 51 years old and include managing directors of Steinhoff Group companies. The fourth individual is described as a 72-year-old trustee of a British Virgin Islands company who is accused of aiding and abetting incorrect balance sheet presentation in four instances.

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