Steinhoff Ex-Chairman Wiese Open to Talks Over $4 Billion Claim

By Tiisetso Motsoeneng

Former Steinhoff chairman and top shareholder Christo Wiese said on Monday he is open to negotiations over his $4 billion claim against the South African retailer, days after it revealed the scale of devastating accounting fraud.

Shoprite Holdings Chairman Christo Wiese, whose companies also include Steinhoff International, speaks as Shoprite reported it’s results in Cape Town, South Africa, February 21, 2017. REUTERS/Mike Hutchings

Steinhoff said on Friday that an independent report had found it overstated profits over several years in a $7.4 billion fraud involving a small group of top executives and outsiders.

It did not name the individuals but said those implicated were no longer employed by Steinhoff, which first disclosed the hole in its accounts in December 2017, knocking 90 percent off the value of its shares and triggering investor lawsuits.

With a stake of about 20 percent which he bought in 2014 when he sold his clothing retailer Pepkor to Steinhoff in exchange for shares, Wiese was particularly hard hit by the crash in its stock price.

“I would expect Steinhoff to give me back my money, and I will give them back their worthless shares,” Wiese told Reuters.

“But everybody knows the company does not have that kind of money, so our approach has been that the only way forward is for all the stakeholders to sit around the table and reconstruct the company,” Wiese added.

Wiese’s claim, which he made public last year, is more or less equivalent to the market value of Pepkor but seven times more than the market value of Steinhoff.

Steinhoff, which declined to comment, owns 70 percent of Pepkor.

“INSANE” ALLEGATIONS

Wiese, who is one of South Africa’s best-known business figures, dismissed any suggestion of wrongdoing.

“People that are making these allegations are insane, or I’m insane. What sane person will put 60 billion rand into a company that he knows is riddled with fraud?,” Wiese asked.

Wiese was one of the early executives of Pepkor, which was co-founded by his parents in the 1960s in Upington on the southern edges of the Kalahari desert.

He is best known for transforming grocery retailer Shoprite from six shops in the 1970s to hundreds across Africa.

The 77-year-old was also instrumental in reinventing Steinhoff, helping to expand it from discount furniture to a sprawling global retail conglomerate selling everything from mattresses and televisions to shoes and clothing.

Pepkor’s chief executive, Leon Lourens, welcomed the findings of the summarised investigation report, which said his company financial statements were clean.

Shares in Steinhoff, which 15 months ago was valued at 224 billion rand, were up more than 5 percent at 1.94 rand, valuing it at around 8 billion rand ($554 million).

(Reporting by Tiisetso Motsoeneng; Editing by David Holmes and Alexander Smith)

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