Wiese: ‘If I didn’t trust people I would still own only five shops’ | Fin24

Wiese: ‘If I didn’t trust people I would still own only five shops’

Jun 28 2018 12:02
Marcia Klein

There is a lot of anger out there following the Steinhoff disaster. And at least some of it is directed at Christo Wiese.

Wiese was Steinhoff’s chairman (since May 2016), is a major shareholder and the driving force behind the merger of Steinhoff with Pepkor (to create Steinhoff Africa Retail, or Star) and, ultimately, with Shoprite, to consolidate his investments.  

The anger is centered around Wiese’s open support of Steinhoff and its disgraced former CEO Markus Jooste. 

His detractors question how much he knew of what was going on at Steinhoff and whether he was in cahoots with Jooste, now known to be the mastermind of multibillion-rand fraud. 

The deception was complex and some six months after it was uncovered, Steinhoff has still not been able to give investors a picture of what happened as investigators sort through the rubble.

Steinhoff has cost Wiese R50bn. But he is still considerably wealthy, and his knock has been easier to cushion than the losses many ordinary investors have incurred. Hence the anger.

But Wiese finds it “astounding” that people question him, and is irked by questions over his involvement in a company which he, and many investors, put their faith in. 

It also upsets him when people say he is able to cushion the Steinhoff blow, whereas others have suffered terribly from its demise, saying he has worked for his money, which is “as valuable to me as much as everyone else’s money”.

Knock-on effects 

There is some concern about the knock-on effect on other companies Wiese is invested in, with him resigning from some boards (such as New Look) and selling some investments, including a chunk of his shares in Shoprite, to meet obligations and free himself to focus on the issues at hand. 

Invicta and Brait results have done little to allay these concerns.  

Wiese says he remains on the boards of his major investments, including Shoprite, Tradehold and Invicta, and has only resigned from some to free his time and only sold shares where necessary. 

“The only assets I disposed of were non-core portfolio investments and I sold a small portion of my Shoprite holdings.

There was an impact on my balance sheet when my assets shrunk by R50bn almost overnight, so I sold a number of portfolio investments and the only core investment I sold out of was a portion of my holding in Shoprite.” 

Wiese, who is 76, says that when he reached the age of 70, he started thinking he should consolidate his investments in one entity. And even now, he will continue to do so.

Asked if there should be concern about any of his other investments, and whether their CEOs or boards were to be trusted, Wiese says there should not be concerns. 

Shoprite, for example, “is the largest private-sector employer in the country, and is extremely well-run, with a strong board. It has committed people and a strong management that is young and energetic and with good corporate governance.”  

He does warn, however: “But then you bump against the Steinhoff phenomenon. The management was trusted by everyone, but look at what appears to have happened there. 

“I have had friends who criticised Jooste, and I ascribed it to personal likes and dislikes, or differences of style. I simply looked at the track record, as did analysts, bankers, ratings agencies and everybody else,” he says.

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This is an extract of the cover story that originally appeared in the 7 July edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

steinhoff  |  markus jooste  |  christo wiese