A friend of late Steinhoff CEO Markus Jooste has been found guilty and sentenced to five years’ imprisonment for insider trading after being warned to sell his shares before the price collapsed in December 2017 after massive fraud was uncovered at the company.
Gerhardus Diedricks Burger, who was arrested by the Hawks on Thursday morning, appeared in the Specialised Commercial Crime Court in Pretoria on Thursday.
The 79-year-old was found guilty after acting on Jooste’s tip-off.
Sentence
The sentence was wholly suspended for five years on condition Burger, 79, is not convicted of contravening section 78(2) of the Financial Markets Act during the period of suspension.
National Prosecuting Authority (NPA) spokesperson Lumka Mahanjana said Burger also has to testify in the criminal proceedings against his accomplices.
“The court issued a confiscation order for €90,000 (about R1.8m) seized by Swiss authorities after the collapse of Steinhoff. This is after Dr Burger pleaded guilty to three counts of insider trading and was convicted of such when he appeared in court.”
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Insider trading
Mahanjana said shortly before the collapse of Steinhoff, Jooste sent Burger who accompanied Steinhoff directors on overseas trips to look after their health a text advising him to sell his Steinhoff shares.
“Dr Burger thereafter sold all the Steinhoff shares held under the Dieter Burger and Lane Burger Trusts where his children are beneficiaries. He also sold 39,722 Steinhoff shares held at Stefana Overseas Ltd, where Dr Burger was also the beneficiary, on the Swiss stock exchange.
“Shortly after the sale of the shares, Steinhoff shares plummeted and became almost worthless. At that point the Financial Sector Conduct Authority (FSCA) instituted investigations where Dr Burger was convicted and found guilty of insider trading for the same transactions and paid a penalty of R3 million to FSCA. FSCA then referred the matter to the NPA for criminal prosecution,” Mahanjana said.
Burger’s arrest follows the arrest of former Steinhoff legal head Stéhan Grobler in March
Grobler is due back in court on October 4, after he was released on bail of R150 000 on charges of fraud and racketeering, which he denied.
Steinhoff’s former chief financial officer, Ben la Grange, who was arrested in June, was also granted R150 000 bail.
“Biggest cases”
Mahanjana added that the Steinhoff case, one of the biggest cases of corporate fraud in the history of South Africa, has been one of the most complex commercial crime cases that the DPCI and the NPA have had to deal with.
“At a point when a significant breakthrough was made to enrol the case earlier this year, the main accused, ex-CEO of Steinhoff Markus Jooste took his life on the eve of his arrest, thus escaping the hands of justice when it mattered the most.
“The National Prosecuting Authority welcomes the conviction and sentence. It is important for the public to understand that criminal prosecutions require patience, preparation, and a certain measure of certainty,” Mahanjana said.
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