Mass sales of art by former Steinhoff CEO Markus Jooste led to a decline in the price of paintings by famous South African artist Jacob Hendrik Pierneef, according to people who were aware of the problem.
Jooste quit as Steinhoff's chief on the day global retailers reported accounting irregularities at the end of 2017, and has since been identified by retailers as the main architect of various financial transactions that triggered the company's collapse. He is the subject of the R850m's claim for damages by Steinhoff, among other lawsuits, although it has not been charged and denies wrongdoing.
A locally known art collector, Jooste has sold various works through private dealers to raise funds, said people, who asked not to be named as unusual transactions. He has a number of works by Pierneef, a fertile landscape painter who died in 1957 and remains a staple of auction houses in Johannesburg and Cape Town, they said.
Jooste and his lawyer, Callie Albertyn, did not respond to requests for comment.
A record price of nearly R20.5 million for Pierneef's work paid for 'Jonkershoek Farm with Twin Peaks Beyond, Stellenbosch' in June 2017, about six months before the Steinhoff scandal erupted.
‘Jonkershoek Field with Twin Peaks Beyond, Stellenbosch, 'by Pierneef
READ: Pierneef's painting set a new record, selling for ‘mammoth’ R20m
Art traders expect markets to grow from there, but are confused when several works next year are not sold, said one person. Word quickly spread that Jooste was taking down at least part of his collection.
Johannesburg-based Strauss & Co. sold nine Pierneef lots for a combined R9.65 million in Cape Town this month, marking "a return to form," according to an October 15 statement on the auction site. "Prices have been diluted by fire sales recently by a distressed collector," he said, without being specific.
Jooste took a number of steps to realize the funds in the weeks after the Steinhoff shares fell. He placed a plot of land on luxury land for sale in the weeks after the start of the scandal, while his investment company at the time lowered a race horse.
Steinhoff was also forced to sell assets to support the balance sheet and keep operating. The owner of the Mattress Company in the US and the US Poundland sells the Austrian furniture chain Rudolf Leiner GmbH and shares in companies such as KAP Industrial Holdings Ltd., among other assets.