It is indeed a heist, as the title of the documentary rightly said. Steinheist is a fascinating account of the biggest fraud in South Africa, which wiped R200 billion off the Johannesburg Stock Exchange (JSE), a never-seen-before destruction of shareholder value that impacted almost everyone in South Africa.
As such a seemingly successful business, Steinhoff was a must-have stock for all investment institutions, including the big government retirement funds and many, many private investors. When it was revealed to be a giant scam in December 2017, the house of cards that Marcus Jooste had built came crashing down. And with it, a lot of other people’s pensions.
Often described as South Africa’s Enron, Steinhoff was a massive multinational furniture company that was heavily invested in by most South African pension funds. It was often touted as a great South African business success story, as was its flamboyant CEO Jooste.
So how did Jooste, once the golden boy of South Africa, do it? And get away with it for so long? That is what Steinheist does with such aplomb. You just can’t stop staring at it, as that old adage goes about driving passed a car accident.
The documentary draws heavily on the book of the same name, written by Rob Rose, one of South Africa’s foremost business journalists, who produced a chillingly good book on the country’s greatest corporate scandal.
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Rose – who was editor of the Financial Mail for a decade, until last year – covered Jooste’s corporate shenanigans for years, often questioning the executive pay scheme and other seemingly unusual funding mechanisms.
Rose was one of only a few who didn’t buy into the Jooste and Steinhoff show – which was ultimately an elaborate Ponzi scheme, where they laundered money between shelf companies and other off-book vehicles.
Steinheist expertly tells the story of the rise of its German founder Bruno Steinhoff, whose Cold War smarts – after he learnt Russian when his family were Russian prisoners of war during the Second World War to work on their farm – saw him build his first empire in post-war Germany. His move to South Africa – ostensibly to gain direct access to the country’s commercial forests – saw Steinhoff grow into a major multinational company.
Enter Jooste, at the time a bright young accountant who would allegedly become South Africa’s biggest fraudster. Along the way he would preside over the greatest single destruction of shareholder (and pension) value; and bring down another of South Africa’s (truly) great businessmen, Christo Weise, who was chairman of Steinhoff at the time.
Steinheist tries to answer the question so many South Africans keep asking: why did nobody see this coming? How was it possible to wreak so much havoc on Africa’s most sophisticated economy, which has world-class financial and stock exchange controls?