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Wiese suffers billions in losses as he cuts stake in Steinhoff

Feb 12 2018 11:45
Thembisile Dzonzi and Janice Kew, Bloomberg

Johannesburg - Christo Wiese has cut his stake in Steinhoff International Holdings to 6.2% and locked in billions of dollars in losses on the scandal-hit South African retailer he helped build into a global powerhouse.

Steinhoff’s ex-chairman, formerly one of the country’s richest men, reduced his shareholding from 20.52%, according to filings he made to the Netherlands’ Authority for the Financial Markets on Friday.

The filing didn’t provide further details on the share disposal.

Steinhoff’s stock has tumbled almost 90% since it said in early December it had uncovered accounting irregularities, shedding more than €11bn euros (about R160bn) of value.

Wiese has emerged as one of the biggest losers in a scandal that’s also led to a fall in the value of a stake owned by the Public Investment Corporation, a manager of South African state-worker pensions.

Banks including JP Morgan and Nomura Holdings have booked hundreds of millions of dollars of losses related to loans and the company’s share plunge, while bondholders left in possession of junk-rated assets included the European Central Bank, which has now liquidated its holding.

Wiese, 76, didn’t immediately respond to requests for comment. His net worth had already fallen to $2.1bn (about R25bn) from $5bn (about R59bn) before the share sale, according to the Bloomberg Billionaires Index.

The PIC, meanwhile, is seeking a review of South African company voting-pool arrangements and new regulations covering large personal shareholdings, representatives of the state-owned company said at a hearing with lawmakers on January 31.

The PIC also said it forced Wiese to resign from Steinhoff on December 15, after the then-chairman had briefly held an executive role to replace Markus Jooste, who quit as chief executive officer at the outbreak of the scandal.

The PIC’s stake was reported at the hearing to be about 9%, the second-largest shareholding after Wiese’s. The money manager didn’t immediately respond to calls and an email seeking comment.

Wiese was also at the hearing, and said news of the scandal came to him as “a bolt from the blue” and that he had no prior knowledge of any wrongdoing. Jooste has been reported by Steinhoff to South Africa’s anti-corruption police unit the Hawks, and hasn’t commented or been seen publicly since the scandal broke.

Steinhoff will have to restate its earnings for at least fiscal 2017, 2016 and 2015 and has hired PwC to investigate the accounting irregularities in more detail. The stock rose 1.2% as of 9:34 a.m. on Monday in Frankfurt, where it moved its primary listing from Johannesburg in 2015.

In an emailed response to questions, Steinhoff said Wiese had notified the company of his share disposal, adding that it isn’t able to comment on the reasons.

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steinhoff  |  pwc  |  markus jooste  |  christo wiese


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