Jooste’s king’s ransom
Is Malcolm King the bagman who collected the proceeds of Markus Jooste’s long list of shady corporate activities?
Financial Mail12 Jul 2018Warren Thompson thompsonw@businesslive.co.za
Since the departure of former CEO Markus Jooste from Steinhoff in early December drew attention to SA’S biggest fraud, a man who seems more elusive than a unicorn has darted in and out of the saga in various roles. He is Malcolm King, who has interacted closely with Steinhoff and Jooste for 15 years, according to information unearthed by the FM.
The relationship began with the fortuitous appearance of a company controlled by King on the share register of retailer Freedom Group, shortly before Steinhoff facilitated a management buyout of it in 2003.
King’s company, Formal Graphics, as it was known, profited handsomely from the Freedom buyout at the time.
But who is King, and why does it look as if Jooste favours him and trusts him implicitly?
Property aristocracy
The FM spoke to a highly regarded banker who met King with Jooste at King’s sprawling country estate in the Cotswolds. The banker says Jooste and King had a relationship that went back a long way, perhaps spanning decades.
King owns the apartment that Jooste’s rumoured mistress, Berdine Odendaal, occupied in Bantry Bay, a fact confirmed by Jooste’s son-in-law.
The FM was able to trace King to two companies operating from the Channel Islands: Le Masurier, a property company which he chairs, and Yatra Capital, a property investment fund which lists King on its investment committee and is focused on the Indian subcontinent.
According to the description provided on the website of Le Masurier, King was the former senior partner of King Sturge, an enormous property consultancy with thousands of employees that had been formed through the merger of two firms, King & Co and JP Sturge, in 1992. King, as head of King & Co, the family business started by his grandfather, Herbert, orchestrated the merger and chaired King Sturge from 1992 until 2006. King has also served on the property advisory committee of Imperial College, London.
He did not respond to the FM’S attempts to reach him.
Steinhoff Group properties
A former Steinhoff UK employee who chose to remain anonymous says: “The links between Jooste and King are unbelievably strong.”
He describes the ethos at the company as “brutal”.
“Just after I was hired in 2012, I was asked to give some advice on the acquisition of a distribution centre for Steinhoff to [rent]. A company called Formal Investments, which I understood was owned by King, was buying it and Steinhoff and Formal were using the same lawyers, which I thought was odd,” he says. A similar transaction, involving a different distribution centre, occurred between the same parties and in the same format a few months before.
“But I was never sure who was funding Formal,” says the exemployee, “because it didn’t seem that they had the money to fund multimillion-pound acquisitions.”
Formal Investments
Formal Investments is domiciled in the notoriously secretive British Virgin Islands, where transparency into the affairs of companies and trusts is nonexistent.
The FM inspected the accounts of Formal that were filed with Companies House in the UK for the 2012 to 2017 financial years. It is quite clear from the financial statements that Formal did not have the means, nor did it raise the capital, to purchase any properties.
By June 2012, for example, Formal’s total assets amounted to just £497,000, and for the previous year it had made a profit of just £522 — not the degree of financial muscle you’d associate with a trader in huge warehouses.
Rather curiously, no audit was performed by the accountants who compiled Freedom’s financial statements. Nor did they venture an opinion on the accuracy of the financial statements, as is acceptable under company law.
Formal Investments lists King and his son Nicholas as directors. And the company’s address, Festival House in Cheltenham, Gloucester, is the address where Steinhoff’s UK office is located.
Formal lists one other director — Robert Boshoff, an SA citizen, whom we traced to an industrial park in Robertsham, southern Johannesburg, where he runs a small printing-press engineering business.
When contacted, Boshoff bluntly told the FM: “King is a personal friend of mine and I have nothing more to say.”
Lanzerac
When Christo Wiese decided to sell one of his wine estates, Lanzerac, in 2011, it was to a hitherto obscure British consortium that paid him for it in Steinhoff shares.
“That was the first time I owned a significant quantity of shares in the company,” Wiese tells the FM.
Wiese says he was never sure
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