DUDU RAMELA: Steinhoff suffered another bruising yesterday [Monday]. The Western Cape High Court prevented the company and its subsidiary, Pepkor Holdings, from selling or dealing in the shares of shoe retailer Tekkie Town.
I’m joined in the studio this evening by Bernard Mostert, the former CEO of Tekkie Town. A very good evening to you. Thank you so much for joining us.
BERNARD MOSTERT: Dudu, thank you very much for having me on your show.
DUDU RAMELA: In handing down the interdict order yesterday, Justin Nathan Erasmus said Tekkie Town had made a proper case for both urgency and the harm it seeks to prevent. Essentially, what does this mean for you?
BERNARD MOSTERT: Dudu, as the former owners of Tekkie Town, when we exchanged our business for shares in Steinhoff, we did so on the basis of a promise that we could grow our business, and that we could also grow our talents. We were promised that we could be involved and run a basket of speciality stores – Shoe City, Dunns and Refinery – that were housed inside Steinhoff at the time.
Of course, Steinhoff turned out to be South Africa’s largest corporate fraud, and the restricted shares that we were offered in exchange for our business and our duties in those companies didn’t turn out to be true. We were forced out of the company that Braam van Huyssteen had built. It was and genuinely remains a proudly South African company. Braam had R20 000 when he started and he took that R20 000, never borrowed a cent, and turned it into 350 stores. So I think a lot of South Africans gained inspiration from that. And to lose that through misrepresentation and fraud is a bitter blow, but it’s also something worth fighting for.
The court judgment that handed us an interdict which prevents Steinhoff from dealing with the assets in a way that we can’t be returned that business, for us is a very significant step towards recovering the business.
DUDU RAMELA: Perhaps let’s just give a little bit of context, and remind someone who may not have been following the story, where things went wrong, and when you realised that something was not right here.
BERNARD MOSTERT: I think we must go back to the day on which Steinhoff first failed to publish their audited results. Almost immediately after that, there was the resignation of Markus Jooste, who was the architect of Steinhoff and who had, over time, put together a lot of businesses in that company globally.
Steinhoff then embarked on a forensic audit that lasted almost 18 months and came out and said that there was a grand fraud in terms of what was represented, and that the company was heavily indebted and essentially wasn’t in a position to cover its creditors, which led to the absolute decimation of the Steinhoff share price.
At the time when we exchanged our business for Steinhoff shares, those Steinhoff shares were worth R75/share. Today they are worth roughly R1/share. Now, you have to ask yourself if Braam and all his team’s efforts, as well as those of many others, 3 500 other South Africans’ efforts, come down to servicing a load of debt that was built on a house of cards. We would argue that’s unfair and we think that we’ve got a very valid claim in terms of restoring the ownership of that business to us, because we know what we want to do with it.
DUDU RAMELA: Debt built on a house of cards! What has been in retrospect, perhaps, the greatest lesson for Tekkie Town in this entire debacle?
BERNARD MOSTERT: I think that, over time as an entrepreneur, you start a business and you have a certain resolve and you build it. Maybe when you start out you are on a singular journey to look after yourself. But, as you go along you add suppliers, in particular you add employees, you see employees grow and you create scope for them. The single biggest lesson is, when that is taken away from you, it is like a vital organ that has been removed, especially when you see that that business in your book is not being used for its purpose any more.
I think Braam said, after the interdict was granted yesterday, that the business had never existed to shield other people from Steinhoff’s losses. It existed to create careers for South Africans. And we feel that, if it is in our hands, as it should be, we will continue to do that.
DUDU RAMELA: What happens now?
BERNARD MOSTERT: Now we wait for the hearing in the main case. Steinhoff has invited everybody with claims to come to the table. I think the fact that we decided to seek the interdict, and successfully got the interdict, shows that we have a very valid claim. For us it is either going to be resolved in terms of a discussion with Steinhoff, or it’s going to be resolved in a court case. But the outcome is the same, as we want to be restored as the management and the owners of that business. We believe that our fight for justice is a fight that will go down to South Africans as a step towards justice, given that all around us we are facing situations where people seem to be getting away with it, fraud.
DUDU RAMELA: Maybe on a lighter note, what does the future hold for Tekkie Town?
BERNARD MOSTERT: Well, until we’ve got it back, I can’t tell you what it holds for Tekkie Town. I can tell you what it will hold when we get it back.
In the meantime, we were forced out of Tekkie Town and for a period of time we were without purpose, I guess. Then some of us got together and started a new chain called Mr Tekkie, and we have now put together 28 Mr Tekkies, which are doing nicely. It’s a business that is complementary to Tekkie Town. It doesn’t compete with Tekkie Town, and we want to run them side by side.
So I think the biggest lesson we got out of this is that we can, even in adversity, be creative. I think that’s a skill that comes hopefully not from arrogance, but from resolve. Throughout the ages we’ve seen people bounce back from bad events, and I think Mr Tekkie is a story of how we bounced back from these events.
DUDU RAMELA: Sure – rising like a phoenix. Thank you very much for your time, Bernard Mostert.