As an avid horse racing fan, African businessman Markus Johannes Jooste knew a thing or two about spotting winners. As a big player in the furniture and household goods market, Jooste was ahead of the race early, but his name was later smeared with allegations of unfair business and accounting practices - stumbling and falling down the stretch.

The 63-year-old businessman is credited with transforming South African manufacturer Steinhoff International into a sprawling conglomerate and the second-largest household goods retailer in Europe.

Jooste sparked this rapid expansion by pressing the right buttons and forging partnerships with established business institutions like billionaire and consumer retail magnate Christo Wiese, who owns Pepkor Holdings, which Steinhoff International bought for $5.7 billion in 2014.

In 2016, Steinhoff's booming growth catapulted Jooste's net worth to around $400 million, making him one of the wealthiest African businessmen at the time. Jooste's roaring success caught the interest of regulators and investigative journalists, who then gave a closer look at his business - what they found out would then trigger a hefty $25 million fine, which authorities say led to his unfortunate recent death. 

Markus Jooste's Career Timeline

Markus Jooste's career is a typical image of the highs and lows of entrepreneurial success. Jooste, a chartered accountant, began his business career as the financial director of GommaGomma before becoming CEO of Steinhoff International in 2000. 

Under his leadership, Steinhoff expanded through acquisitions, transforming from a small furniture manufacturer into a global furniture corporation. Key acquisitions included Europe's leading home furnishings retail chain Conforama, American mattress store chain Mattress Firm, and British variety store chain Poundland, although the premium paid for Mattress Firm attracted scrutiny.

In 2015, Steinhoff purchased Pepkor from Wiese for a high price, leading to a failed merger with Shoprite in 2016. In response, Jooste and Wiese raised capital in 2017 to split off Pepkor's South African division, which raised concerns about debt repayment and possible insider trading. Despite financial success, Jooste's lavish spending, including an expensive rugby excursion, drew criticism.

At the height of Jooste's business success, he donated 10 million rand to his former school's old boys trust. However, the donation was never used for anything, as for concerns of pending potential claims.

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Steinhoff faced legal issues in 2015 when authorities raided its headquarters over balance sheet concerns. Due to its European focus, the company relocated its primary listing to Frankfurt in 2015. By 2016, Steinhoff was a major player in the global retail market, but its financial position deteriorated in 2017, with rising debt and falling profits.

Questions arose about Steinhoff's low effective tax rate, and allegations of fraud surfaced in 2017. Jooste resigned as CEO amidst these allegations, and investigations revealed potentially inflated revenues and opaque company structures. Further scrutiny suggested Jooste may have had secret stakes in subsidiaries acquired at premiums.

On December 4, 2017, insiders found that Steinhoff announced unaudited financial statements, prompting Jooste's resignation from multiple positions. Despite attempting to resign as a chartered accountant, he was suspended pending disciplinary proceedings. Jooste attributed his resignation to disagreements with the board over finding new auditors.

Business Scandal

In August 2017, German business news outlet Manager Magazin reported that Markus Jooste, then CEO of Steinhoff, was under investigation by German authorities, triggering a freefall in Steinhoff's stock price, which later recovered after the company denied the allegations. 

Jooste resigned in December 2017 amidst admissions of "accounting irregularities" within Steinhoff, prompting an investigation by PwC. Chairwoman Heather Sonn disclosed that electronic records vital for the investigation had been destroyed. PwC discovered that Steinhoff management used $6.5 billion in fraudulent transactions to increase earnings.

Alleged admissions from Jooste regarding attempts to conceal losses further exacerbated the situation, leading to a significant decline in Steinhoff's share price and credit rating. Despite quitting the company in 2017, Jooste was still being investigated for his involvement in the accounting fraud.

The fallout impacted various stakeholders, with significant losses incurred by shareholders like Christo Wiese's Titan Group, the Public Investment Corporation (PIC), Coronation, BlackRock, and financial institutions holding Steinhoff bonds. The European Central Bank and several major banks also suffered substantial losses.

The scandal, termed the largest corporate scandal in South African history, wiped out billions from Steinhoff's market value, affecting its subsidiaries like Steinhoff Africa Retail (Star). The Johannesburg Stock Exchange experienced significant losses, affecting South Africa's GDP.

Steinhoff's financial position worsened as its debt was revealed, prompting management to secure financing and sell assets for liquidity. Restatements of financials for previous years revealed significant losses, leading to fines imposed by regulatory authorities. Investigations and litigation ensued, including claims against Jooste and other executives and legal actions against auditing firms and banks involved with Steinhoff. 

Earlier this week, VCPost reported that Jooste was found dead in his hometown, Hermanus, in what officials believe was a suicide after being served with an arrest warrant. 

Jooste reportedly took his own life via gunshot hours after the Financial Sector Conduct Authority (FSCA) fined him a stunning 475 million rand ($25 million) and announced plans to file a criminal prosecution against him. According to reports, the fine was the largest ever imposed in South Africa. 

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