South Africa’s central bank spent years investigating Markus Jooste, the former chief executive officer of scandal-hit retailer Steinhoff International Holdings NV, before moving to seize his assets last week for violating foreign exchange control rules.
“We have been at the Steinhoff investigation since 2017,” Lesetja Kganyago, the governor of the South African Reserve Bank, said in an October 22 interview at a conference in the Drakensberg mountains. “We have spent a lot of money doing the investigation.”
Numerous legal authorities, regulatory probes and lawsuits pointed to Jooste, 61, as the main architect of the accounting scandal that engulfed Steinhoff in late 2017, although he has yet to face criminal charges. The assets seized include a wine farm in Stellenbosch, near Cape Town, and a property in the coastal town of Hermanus, court papers show.
Other Steinhoff executives have also had their assets frozen, according to Kganyago, who expects the moves to be legally contested. The action taken by the central bank had nothing to do with South Africa’s attempts to avoid being placed on a global illicit-finance watchlist, he said.
The Financial Action Task Force, which polices compliance with anti-money laundering and terror-financing measures, has warned that it could include the country on its so-called gray list in February unless it tightens up its controls. A study conducted by research and consulting company Intellidex on behalf of lobby group Business Leadership South Africa found there is an 85% probability of that happening.
“The gaps or the shortcomings that FATF had identified, have a lot to do with whether or not prosecution has taken place,” and the justice minister has said that will happen, Kganyago said. “Our focus as the South African government is to do our best to avoid the gray listing, but should it end up taking place, to get out of the gray list as quickly as possible.”
Other highlights from the interview:
- The central bank expects that inflation peaked in the third quarter.
- “We work on quarterly figures. Monthly figures are not very useful.”
- “Inflation, even if it has peaked, it is still outside of our target. Our focus is what is inflation going to be, into the next 12 to 18 months because that is what we can influence.”
- “We would like to see it in the target and firmly anchored at the mid-point of our inflation targeting range and that is what we are focusing on.”
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