TRUST COMPLIANCE AFTER STEINHOFF: WHAT THE SILVEROAK ATTACHMENT TEACHES US ABOUT “ALTER EGO” RISK

The Steinhoff collapse remains South Africa’s most consequential corporate scandal.

In December 2017, Steinhoff’s share price imploded, wiping its value on a massive scale and gravely affecting pension investors. Estimates at the time quantified losses to  be roughly R200 billion on the JSE, while Christo Wiese’s (“Wiese”) net worth plummeted.

In March 2024, the Financial Sector Conduct Authority (“FSCA”) imposed a R475 million administrative penalty on former CEO Markus Jooste (“Jooste”) for false and/or misleading statements. Jooste committed suicide the following day.

Beyond the market drama, the saga offers legal lessons about how family trusts operate, are structured and in which instances trust assets can be accessed by creditors and regulators.

The Silveroak Family Trust: What Went Wrong?

Following Jooste’s passing, attention turned to the Silveroak Family Trust, a structure intended to preserve and manage assets for Jooste’s family. However, it soon came under severe legal scrutiny.

Although the trust was formally registered as a family trust, it reportedly lacked independent oversight and displayed a number of the signs of an alter ego trust. Essentially meaning it was a vehicle used by Jooste to retain de facto control over the trust assets that should have been beyond his personal reach.

The trust was administered by two of Jooste’s close associates and his son, which raised questions about whether any genuine fiduciary discretion was exercised by the trustees. The absence of impartial trustees and the ongoing influence of Jooste created a situation in which the trust operated, for all intents and purposes, as a personal extension of Jooste, rather than a separate and protected entity for the benefit of its beneficiaries.

The Legal Problem: Alter Ego Trusts and Piercing the Veil

Under the Trust Property Control Act 57 of 1988, a trust founder is required to divest control over trust assets. Trustees are then appointed to administer those assets in the interests and for the benefit of the beneficiaries, not the founder. This fiduciary duty is well-established in case law.

A trust that is valid in form but misused in function, for example by allowing the founder and/or trustees to treat the trust property as their own, may very well be disregarded by a court. This opens the door for creditors and regulators to access trust assets, which is what occurred in the Silveroak case.

South African Reserve Bank Attachment and Regulatory Oversight

Because Jooste continued to treat the assets in the Silveroak Family Trust as his own, the South African Reserve Bank (“SARB”) managed to obtain an attachment order in terms of the Exchange Control Regulations. SARB successfully froze approximately R1.4 billion in assets held by the trust, treating them as part of Jooste’s personal estate for enforcement purposes.

This regulatory action illustrates that courts and regulators are capable of looking past solely the formal trust structure when it is misused to conceal assets and/or evade financial responsibility.

New(er) Compliance Duties: Beneficial‑Ownership Registers for Trusts

From 1 April 2023, trustees must establish, maintain and lodge a beneficial‑ownership (“BO”) register with the Master of the High Court (as per the Trust Property Control Act [“TPCA”] section 11A and regulations). The Chief Master’s Directive 8 of 2023 requires electronic lodgement and ongoing updates if/when information changes.

Non‑compliance with the above is a criminal offence punishable by a fine up to R10 million and/or up to 5 (five) years’ imprisonment (TPCA section 19(2) as amended).

Key Takeaways for Families, Trustees and Business Owners

The Steinhoff saga is a high-profile example of how non-compliance with trust law can lead to catastrophic legal and financial consequences. Trusts are powerful estate planning and asset protection tools, but only when they are correctly set up and administered.

There are various formal requirements for the creation of a trust, however this case has highlighted the often overlooked essential requirements:

1. The founder must relinquish control of trust property;

2. Independent trustees must be appointed, especially in family trusts;

3. Trustees must exercise discretion independently and, in the beneficiaries’ best interests;

4. Trust assets must be kept separate from the personal assets of the founder and trustees;

5. All dealings involving the trust should be documented by resolutions and financials must be kept up to date;

6. Trusts must comply with beneficial ownership disclosure regulations, effective from April 2023.

Conclusion

If your trust lacks independent governance, fails to separate trust assets from personal finances or is run like a personal bank account, you risk more than simply bad optics, you risk legal exposure and forfeiture of assets.

At URA, we assist clients with, among other things:

• Drafting valid, enforceable trust deeds;

• Conducting trust governance audits;

• Advising on fiduciary duties and compliance; and

• Ensuring trust structures meet all statutory and regulatory requirements.

If you have an existing family trust or are considering setting up a trust and need guidance and legal assistance, get in touch to ensure it is robust, compliant and protects the interests it was originally (and legally) intended to protect.

Contact our specialist attorneys at info@rouxlegal.com.

By Juneen Dippenaar

(Candidate Attorney)

18 August 2025

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this article, neither the writer/s of the article nor the publisher shall bear any responsibility for the consequences of any actions based on information and/or recommendations contained herein. The URA article material is for informational and educational purposes only.

This content is the property of URA. Whilst we encourage the sharing of our content for informational purposes, if you wish to copy and/or reproduce our content on your own platform and/or website, kindly ensure that proper credit is given to URA.