The Steinhoff swindle, and South Africa’s struggle with white-collar crime

It is now nine years since Steinhoff, the retailer that owned some fabulous brands, including Pep, and less fabulous ones like Conforama, collapsed spectacularly, wiping R250bn off the JSE within days.

It was a bracing moment for South African corporate governance, forcing the country to confront the fact that despite its vaunted King code, some of our smartest corporate minds were no match for an ingenious crook like Markus Jooste. Since then, in almost every forum where Steinhoff’s ghost has been discussed and dissected, there are two ever-present questions.

First, is Jooste really dead – is he not living on an island somewhere with Gavin Watson, and in the evening supping on magnificent curries conjured up by Brett Kebble? (The answer is very much yes. The body, the blood, the death certificate – he’s a master swindler, sure, but that would be supernatural.)

The second question has been: will anyone ever be held accountable for swindling thousands of investors and pension funds out of billions of rands?

There were justifiable reasons to be cynical on this front – Jooste stitched together the most complex scam in the country’s history, somehow managing to slip R106bn in fake profits past one of the world’s largest auditing firms, Deloitte, as well as the most decorated board of directors who, collectively, held three PhDs in accounting. Now, anyone who has seen the Hawks in action, stumbling over basic evidence-gathering in the state-capture cases, would have thought: oy vey!

Six down – still another to go

Still, Steinhoff was such a vital case for the country’s governance and an indicator of accountability for foreign investors that I always believed jail time was inevitable. Well, eventually at any rate. And, sure, it took nearly a decade, in which we’ve had a whole pandemic, created AI platforms like ChatGPT, and the ANC has lost its stranglehold on power, but it has happened.

Last week, the sixth conviction in the wider Steinhoff fraud case was handed down: audit executive Hein Odendaal was given a four-year jail term or a R2m fine (what’s the guess he’s taking the fine) in Pretoria’s Specialised Commercial Crimes Court.

This adds to the three other convictions in South Africa: Steinhoff’s former finance director Ben la Grange, handed an effective five-year jail sentence in October 2024; Iwan Schelbert, one of the retailer’s former auditors, who was sentenced to five years in jail in January; and the company’s former doctor, Gerhardus Burger, who in 2024 was given a suspended sentence for insider trading after acting on Jooste’s tip-off.

For La Grange, Odendaal and Schelbert, their sin was to process a hand-written invoice that Jooste handed to La Grange on a plane trip in November 2016 for €23.5m, which Jooste claimed was for “rebates” owed to Steinhoff by European suppliers. Actually, there was no such “rebate” deal, and no €23.5m. And while La Grange, Odendaal and Schelbert might have been none the wiser that this was just a fiction, the end result was that R376m of fake money was magicked into Steinhoff’s accounts.

The other two convictions were more significant, since these involved two of Jooste’s intentional accomplices in the fraud: former Steinhoff Europe CEO Siegmar Schmidt, and the former finance director of that European business, Dirk Schreiber.

Schreiber, who had pleaded with Jooste to stop padding the accounts lest they be found out, was convicted for three and a half years in Germany’s Oldenburg court in 2023, while that same court later sentenced Schmidt, who had testified that Jooste had created a “climate of fear”, to six years in jail for fiddling tax.

The job isn’t done, of course: Stéhan Grobler, Steinhoff’s former treasurer, is still on trial in Pretoria. But six convictions isn’t nothing.

The net is not closing on white-collar crime

So does this mean white-collar crooks should shake in their boots?

Not a bit of it.

For one thing, the most recent police crime statistics show that one of the few categories going the wrong way is that of white-collar crime. In the three months to September, there were 37,248 cases reported of “commercial crimes” – a rather alarming 36% above the number of cases reported five years earlier.

And, just as alarming is that while the incidents are increasing, it seems not as many are being investigated and sent through for prosecution either.

The most recent annual report of the National Prosecuting Authority (NPA), for the year to March 2025, reported a pretty impressive 88% conviction rate for serious commercial crimes – but the worrying part is that this only amounted to 235 convictions, which is nearly half the 433 convictions in the year to March 2020.

The NPA explains this drop as “mainly due to a management decision in November 2020 to migrate some cases to the general regional courts to alleviate the workload, with cases becoming more complex and taking longer to finalise”. And this may all be true, but that doesn’t exactly instil huge faith that the net is closing on white-collar crooks.

Which isn’t to say that these Steinhoff convictions aren’t welcome – as a flagship case in the country’s largest fraud, the fact that the Hawks and NPA were able to secure jail terms will at least contradict those who argue that the criminal justice apparatus is 100% broken. And while it’s a huge pity that Jooste will never stand in the dock and be grilled over why he diddled thousands of South Africans out of their money, the NPA will still be able to point to these scalps as evidence that it can get the job done.

But if you’re looking for the platform upon which victory over white-collar crime should be unambiguously declared, this is not it.

So far, these local convictions have been plea deals struck without the state having to go through the hassle of a trial; in May, it will have its first opportunity when Grobler goes on trial, and that may be more instructive of its commercial crimefighting skills.

ALSO READ:

• Inside the PwC report: What really brought Steinhoff to its knees
• Markus did the crime – now this man is doing the time
• Steinhoff loses (another) battle for secrecy

_{Top image: Rawpixel/Currency collage.}