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Tekkie Town founder resigns from Star with immediate effect

Questions the company’s corporate governance and the integrity of executives.

Braam van Huyssteen, the founder and chairman of Tekkie Town, has resigned from his role as chairman of Steinhoff Africa Retail’s (Star) Property division with immediate effect.

He will remain the chairman of the Speciality Fashion and Footwear division under which the business he founded and sold to Steinhoff still remains. But his resignation means he will no longer be a member of Star’s executive committee.

When contacted for comment, Van Huyssteen indicated he had initiated litigation against Star CEO, Leon Lourens, believing that Star had breached his employment contract and then failed to remedy it. He resigned with immediate effect on Thursday afternoon and will now be seeking damages that could run into tens of millions of rands against the company.

Van Huyssteen said, “It’s been incredibly disappointing. I have spent my life building this company and looking after my team. We have always said we work for the company, the company does not work for us. I had committed to do the same for Steinhoff and Star but people who care more about their own financial position and who gladly accept mediocre outcomes have made it untenable for me to do what I have always done, day-in, and day-out.”

Van Huyssteen raised a number of issues that may shed more light on why he is attempting to have the acquisition of Tekkie Town by Steinhoff cancelled and reversed. “I question whether all the senior members of the board have an understanding of what their fiduciary duties are, and whether the quality of the due processes they implement during contractual and employment disputes is of a high enough standard. I also question whether they have adequately disclosed all material information to the market. I think we need to closely examine the standard of corporate governance in the company and specifically the integrity of some of the senior executives. They have made my position totally untenable, hence my resignation.”

Moneyweb reached out to Star yesterday evening and they indicated they will take a decision whether or not to respond on Friday evening. 

Who is Braam van Huyssteen?

Van Huyssteen founded Tekkie Town in 1989 before choosing to sell, along with a small consortium of other investors in the business, to Steinhoff in August 2016 for R3.2 billion. Five of the six shareholders comprising the consortium elected to receive shares in Steinhoff as payment for their interest. They also agreed to ‘lock-up’ periods of up to three years before they are allowed to sell the shares they had received.

Tekkie Town was then acquired by Star last year ahead of the Steinhoff subsidiaries’ listing on the JSE in September.

Van Huyssteen and a group of other Tekkie Town executives agreed to stay on post the acquisition by Steinhoff, and he joined Star as Chairman of its Property division and of its Speciality Fashion and Footwear division. 

He was voted SA Entrepreneur of the Year, 2011.

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COMMENTS   18

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Always take cash! Five of the six former shareholders were paid in Steinhoff shares (fraudulently overvalued shares).

From the horses mouth, the lack of exercising proper “fiduciary duties” and proper market disclosure continue unabated at STAR and of course at Steinhoff NV. The thing is, it is very difficult to change the deep rooted corporate culture of non-compliance and cowboy-style management without changing the board and senior management.

Welcome to SA from France!

i think this Braam called it monopoly money they were paid with.

When the seller give a permission to sell his property (e.g. Takkie Town, or Wiese) to a buyer, and the seller officially consent that the property get registered on the buyers name then that seller no longer own the property , and cannot reverse the selling no matter what what the story was, including if he claims he took shares in return and the share price went down because of incorrect balance sheet at the time.
Is this seller prepared to reverse the deal based on him paying back the value of the shares on the price of the shares at the time the deal was done? (I bet definitely not!!!) they want to give back the shares at a time when the share price is down (how convenient).

Hey John33, When the seller give a permission to sell his property, it is on the understanding the buyer is honest in representing what his currency “shares” are worth, not that they are founded on fraud. Would he sell his property if he knew the lies the buyer was representing? Certainly not! Would he have done the deal? Certainly not! Could he expect to reverse the deal if the buyer had represented his currency “shares” fairly? Certainly not! FRAUDULANT MISREPRESENTATION is something you should study! Sellers are guilty of GREED and stupidity, nobody who knows them will argue! Buyers are guilty of FRAUD! BIG difference!

The buyer (which is Steinhoff share holders) didn’t know that there’s any thing wrong with the balance sheet, which was audited and approved by Deloitte, CFO, CEO, and board members, further more the buyer (which is Steinhoff share holders) are also suffering huge losses because of (Deloitte, CFO, CEO, and board members) not doing their job properly in 2015 and 2016 balance sheets.
In any case once a property is registered on a new owners name there’s no way to reverse the deal, no matter what the circumstances were.
They might be able to open a fraud case against the alleged fraudsters (fraud is not proven yet, and it will take years to prove or not prove it) or against the wrong doers (if proven who did it and why), however Steinhoff (or more specifically the share holders) cannot be asked to pay for wrong doing not done by them.

John 33 – your understanding of the law (contractual agreements, acquisitions and mergers, corporate transactions, listed companies, redress of rights, fraudulant basis, etc) are impaired. Also one should realise that these cases are instituted under the laws of the European country where the corporate domicilium of Steinhoff international NV resorts.

I highly doubt Braum will get out of this mess. Since he has been friends with so many of the people accused, it makes me think of the statement given by Micheal Corleone: “Just when I thought I was out, they pull me back in”.

All the best Braum. Becareful who you make friends with.

Braam….you made a bad descision. Business is risk…u took one and it backfired.You had your chance to write “checks and balances” into a contract when the deal was done….including clauses that cover against theft, fraud etc… a chance I might add that millions of investors never got. Cant believe that people such as yourself, wiese etc were so naive. Die dom hy is die sukkel hy kom.

That price plus the incentive bonus calculates back to R15m per Tacky Town. For that one would expect the title deed not just the going concern. The orignal deal sounds fishy. No way in hell an averageTacky Town generates the R3m NPAT to justify R15m sticker price?

For a history lesson, Shuttleworth sold Thawte for what was $500m odd in Verisign shares. He can thank SARB that forced him to sell those shares under portfolio rules because he was a tiny Verisign shareholder. SARB saved Shuttleworth about $450m. Then a few years later he sued them 🙂

Thanks for the History lesson Johan. Mark’s history lesson sounds similar to those vendors who sold their company into Exchange and saw their paper value rise from R1 to almost R40 and then back down to R1.50! I’m sure Mark was happier selling to Version than Ixchange where he would have been the largest shareholder and still trying to get out!

Zimbo:

The lesson part of history was that public market prices are what they are, they are not always rational and in most cases it is overpriced paper buying over priced paper. So suing because Steinhoff is now under R2 from R50 is not rational. You takes your chances considering the price offered (high) and the terms (risk). If Steinhoff were R120 now the vendors would be hysterically happy.

There is however a vast difference between general market madness as per dot-com and director fraud. I would much rather see the vendors go after the directors in their personal capacities: wipe them out.

I presume in your research on Ixchange (not Exchange) you also uncovered that the directors owned more of Ixchange when it delisted at R5 something than they owned when it went public – maybe too many facts to digest? That Thawte deal was brilliant. Back then the story was that the highest local offer was in rands what the dollar deal closed at. Make hay while the sun shines!

But when the sun sets, cowboys don’t cry

@Johan_Buys: The price of Steinhoff (SNH) currently (1.5 ZAR) is not “irrational”, and one of the reasons is that the financial managers and institutions are not allowed by their internal rules (bureaucracy) to buy into a share that doesn’t have an audited balance sheet, even when the price is very low, and PwC are taking quite long time to finalize their forensic investigation (the longer they take the more money they make), even though many financial experts believe that such investigation shouldn’t take more than 6 months.

It defies logic that you would sue an employer, regardless of the fact or lack of that fact that you founded the company or subsidiary in question, and expect to be kept in that same exact company or be part of that committee. It is not reasonable to expect to that other members of the committee would be able to discuss matters pertinent to the litigation in the presence of ‘a party’ to the litigation. It makes sense that a person be set free to go and make their living elsewhere. I cannot see this being considered unlawful, there are deep and irreconciliable differences here, not just small chops.

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