Steinheist. Rob Rose
vehicle plants outside Pretoria. Today, the industrial area Ga-Rankuwa is a knotted collection of rusted barbed wire, soulless warehouses, peeling walls where aspiring backyard panelbeaters have scrawled their numbers, and adverts for cheap beer by the case. There’s hardly a blade of grass to be seen. This was hardly an auspicious place for the young Jooste to kick-start a dazzling career that would take him to the showrooms of France or the trading floor of the Frankfurt Stock Exchange.
Today, Michael Delport says that Markus Jooste first arrived at his door as an articled clerk, when Greenwoods came to audit various companies, which Delport owned. “I thought he was bright, and I needed a financial guy. He came to work for me, and was pleasant. I could see he was clever – he could think ten years ahead of me.”9 Delport said that eventually they parted ways. “I was probably not on a hunting trail to take over every other business – maybe I thought too small. I like to keep it simple and I don’t want to go into a lot of debt.” But Delport says he never saw anything shady with his company’s finances. “I trusted the books and would have known if anything was wrong.”
Quickly enough, Delport, who was fifteen years senior to Jooste, faded out of the picture. But official Companies Office records show that he and Jooste had a long association until the mid-1990s, both being joint directors of various companies, including Jurgens.10 But Jooste was, in his bones, a dealmaker. So, when he and Delport were offered the chance to sell their business to the canning company Gants, they leapt at it. “We sold, got paid, and actually were without a job the next day. And for both of us, it was a thing that we didn’t expect in the hype of doing a very good financial deal, in those early days,” said Jooste in an in-house recording made in 2013.11
Then, a moment of remarkable serendipity broke. “We saw a sign opposite the street in Ga-Rankuwa, where our canning factory was, saying that on Saturday there’s an auction, to auction off a building. So, on the Saturday we went to the auction and we bought the building, for the simple reason that there was a separate little office park which was empty – and in the building Gomma Gomma was the tenant.” It meant, at least, that he and Delport had a place to go on Monday morning. At the time, Gomma Gomma was largely owned by a man called Rafie Steel. But within three or four months, Steel ran short of cash, so he went to speak to Jooste and Delport. Jooste says: “We got involved, and we recapitalised the company Gomma Gomma and took control. And that’s how we entered the furniture business. So, it was actually by total default. So, don’t believe it’s all a strategy that Steinhoff started many years ago.”12
Jooste’s belief was that the series of steps that led Gomma Gomma from the industrial wasteland of Ga-Rankuwa, to the Westerstede office of Bruno Steinhoff, and ultimately to the Frankfort Stock Exchange, were the result of luck and circumstance more than anything else. “Nobody is clever enough to think out all these things. They just happen, and you must follow your nose . . . I think the big difference in life is with the people who take those chances that get offered to them – that’s really the difference.” Fateful words, in the light of what would happen to him two decades later.
Soon, Markus began repaying his earlier loyalties. Frikkie Nel, discussing Steinhoff’s origins in 2013, says that in the mid-1980s, “I got a phone call from Markus one day, and he said he was joining with Michael Delport, and they were looking for an accountant. I then decided to join them at Gomma Gomma.”13 Jan van der Merwe, who also joined, described it as a tough time. “It was a couple of us . . . getting into the furniture business: Markus running the company, doing the sales, Frikkie the financial director, Iwan looking at all the debtors and the creditors, and myself busy in the factory planning and loading trucks and doing the buying. There wasn’t place for all the accountants to do the financial work.”14
Gomma Gomma wasn’t exactly flush with cash, and it owed a small fortune to its bankers, Absa. Legend has it that cash flow was so tight that when people trudged the short distance from the office to the furniture factory, they’d pick up paper clips from the floor for fear of wasting resources. It sounds apocryphal, but you get the picture.
One thing it had going for it, however, was the fact that during the apartheid years the governing National Party had given plenty of tax breaks to companies to set up their businesses in the “independent homelands” like Bophuthatswana. But then, for the first time in 1994, all South Africans got to vote for a new government and the winner was the African National Congress, led by Nelson Mandela. For Gomma Gomma, which was already on the breadline, the new regime presented an immense risk. Terence Craig joined investment company Allan Gray as an analyst the week of that landmark vote. A few weeks later, he and a colleague went to visit Gomma Gomma’s factory in Ga-Rankuwa, as Allan Gray had an indirect investment in it. “The first guy who walked up to me when I got there was Markus Jooste,” says Craig today. “Markus came across as very slick, in his Doc Martens shoes and his very polished manner, and he gave us a tour of the factory.”15 Craig was impressed. But as he was leaving, he posed one last question to Jooste: the reason you located Gomma Gomma in Ga-Rankuwa was because of the tax breaks from the apartheid government. But now that democracy is here, this tax break will surely fall away. What will happen to Gomma Gomma – will it be profitable then? “Markus’s answer stuck with me until today,” he says. “No, we wouldn’t be profitable in that case, he said, but we’ll always find a tax break somewhere.”
It is now more than twenty years later, but Craig says he has thought about Jooste’s answer plenty of times since the revelations of his shenanigans first emerged.
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Back in those early days, the furniture that Gomma Gomma churned out wasn’t especially memorable. For the most part, it consisted of run-of-the-mill upholstered lounge suites – as many as 150 on some days – as well as a range of coffee tables. But, apart from its massive upholstery and show-wood factory, the company did have one major asset that would in time attract the interest of potential investors: Markus Jooste.
In those early days, Jooste worked harder than anyone, regularly pulling 16-hour days. Often, he would stay up drinking brandy and whisky with his staff till 1 am or later, after a tough day. But he’d also be the first one up at 8 am, impeccably dressed, chipper and keen to get cracking. “He never really slept a lot,” says one person who knew him well. “It helped him get a lot done, while everyone else wondered how he found the time for what he did.”16 This never changed, even though Jooste later reached the sort of position where he could afford to take his foot off the accelerator. “He was the hardest-working guy I’ve ever encountered,” says someone with whom Jooste once did a deal. “I once flew to London on the same flight as Markus, and he worked the entire flight. He was going through a balance sheet, and he’d first mark it with a black pen, then a blue pen, then a red pen. When we landed I asked him, ‘Markus, did you sleep?’ He replied: ‘Ek het ’n uurtjie gevat.’”17
Throughout the years, Jooste would cultivate a reputation as a tough-as-nails boytjie. “Markus liked to party hard – staying up late and drinking with the boys. He was never far away from a double Johnnie Walker Black,” says one former businessman who spent plenty of time with him. Famously, Markus could out-drink many people.
Early on, one of the companies that Gomma Gomma bought was a furniture maker called Bakker & Steyger, based in Epping in Cape Town, which churned out dining-room suites, coffee tables, wall units and other timber products. Christopher Rutledge, who was a director at Bakker & Steyger in those days, says it was clear that Jooste valued loyalty above all. “He had his lieutenants, Frikkie Nel and Jan van der Merwe, who did everything for him. Every decision that was made would pass through them on the way to Markus. It was all about the old Stellenbosch club.”18
In those early days, Rutledge says the culture was rigidly homogeneous: uncompromisingly macho, Afrikaans and steadfastly patriarchal. Everyone deferred to Markus. “Even then, it was a red flag. The fact that he had this close group around him who weren’t prepared to challenge his decisions, who’d all come from the same place and wanted to preserve that hierarchy, was worrying. Markus was untouchable.” Rutledge recounted a story, which he’s also written about for a news website, that provides an insightful example of how Jooste operated. One Friday night, after 8 pm, Bakker & Steyger’s executives got an SMS from Markus, ordering