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Steinhoff ex-chairman Wiese open to talks over $4bn claim

Wiese says stakeholders should sit around the table and reconstruct the company.
Former Steinhoff chairman, Christo Wiese was instrumental in reinventing Steinhoff in its early days. Picture: Waldo Sweigers, Bloomberg

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

Steinhoff said on Friday that an independent report had found it overstated profits — which were signed off by Deloitte — 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% off the value of its shares and triggering investor lawsuits.

Read: Steinhoff to dig deeper into $7.4bn of dodgy deals

With a stake of about 20% which he acquired 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% of Pepkor.

Steinhoff, which is also listed in Frankfurt and is registered in the Netherlands, is also facing a class action lawsuit from Dutch shareholder group, VEB.

VEB is seeking unspecified compensation from Steinhoff and its auditor at the time, Deloitte, for damages suffered from misleading information on the financial health of the company.

“As far as VEB is concerned, this report in no manner, shape or form influences our action. It does nothing to frustrate it, it does nothing to make it more tenuous or anything,” spokesman Armand Kersten said.

VEB, which says it has recouped 2 billion euros for investors in various companies over the years, suspended the class action litigation in October until April 3 to allow the company to focus on cleaning up its balance sheet.

Deloitte, whose refusal to sign off on the 2017 earnings report sparked the investigation, has denied any wrongdoing.

‘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 R224 billion, were up more than 5% at R1.94, valuing it at around R8 billion ($554 million). 

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He is mad. What did he think his role as the chairman was? Was it not oversight over management? He should be held accountable for governance failures in Steinhoff if anything.

Agree – delusional also comes to mind.

He was part of the team – now he acts as if he did nothing and massive funds must flow into his pocket.

What a seriously deluded bully – go sit on your game farm!!!

And how could Deloitte as auditors not pick up a US$7.4 billion accounting fraud? Either they are not very good at auditing or what?

I cannot understand the claims against Steinhoff. The claims are against the directors who were negligent or failed in their duties. Is Wiesa suing himself then??
Maybe I am missing the point about liability in terms of company law.

He is sueing the company that is a separate legal person under the law. What does not make sense is that, as he admits himself, there is no money in Steinhoff to repay any claims.

Well,
if you lost a couple of billion us$, a narcissist will find somebody else responsible instead of him/herself…

His claim would position himself ahead of other shareholders, as he’d become a creditor. So he’s shares might be worthless, but he won’t walk away with nothing

I personally don’t trust Wiese – he did some rather unconventional manoeuvring when he acquired OK Bazaars for R 1 and then there is the story of him moving cash through airport terminals, so just how much did he know about what was going on at SNH, if he didn’t know anything then did he fulfill his fiduciary functions as chairman of the board!

if remember correctly, he got his airport money back!

Reminds me of Emperor Palpatine. Manipulates corporate governance for personal enrichment and then pleads ignorance. He and his lackeys oversaw the largest ponzi scheme ever in South Africa. How he can still be allowed to be on the board of any listed company is a disgrace.

Do your research and buyer beware whenever you see his name.

and it is strange how certain commentators still treat people like Wiese and Jooste with a discreet kind of respect?

chev, i think this is called the Stockholm Syndrome!!!

Weise is delusional. He is “playing innocent” to exonerate himself.

What about the Euro 325 million paid to him as an “Upfront / Voorskot” payment he received OVERSEAS without documents for his Shoprite equity?

This transaction was mentioned at the AGM of Steinhoff 2018 by Health Sonn.

This transaction has money laundering, tax avoidance, asset shifting all over it which is illegal in South Africa law

And the almost $3bn paid for the purchase of Mattrass Factory over what was paid to the owners at $1.7bn.
The directors were so fast asleep that they should be criminally charged

Where was the board,independent and non executive director in all this saga.

These non Executive Directors and Chairman it seems do not fulfill their oversight role and are Hood Winked by the Executive Director which are personality driven,as was the case in african Bank,W&A,ETC.

Where is the oversight Role of the Sponsors.

Deloitte being the group Auditors needs to be Sued for this False reporting.

This once again high Light that there can be no Trust place on Audited Result,and its Sponsors nor on Merchant And Investment Bank that plays a part on the Listing of Companies

The Board was totally and utterly inept. Van Zyl, Booysens, Sonnetc. had no idea what was going on-completely clueless. Red flags were both the tax rate and cash flow to profits difference.

All the boards directors should be declared delinquent -the lot should never be let loose to mismanage public investors money ever again.

As for the fund managers-their deep analysis etc-all rubbish-however Mr JP Verster saw through this and good luck to him-the only one with an IQ in an industry of fools and thieves

Agree completely inept and delinquent.
If they are on any other company boards they should be told to resign.
A R200 billion company and they did not know????? But they gladly took their directors fee, plus travelling to board meetings overseas and endorsed every increase proposed.

In a mad scramble to get away from SARS and the criminal ANC government, he stepped on the landmine that was manufactured by himself and planted by Jooste.

100% accurate, clear he was trying to externalise the empire and steinhoff was a viable vehicle… then boom, it wasnt…

I think he got taken, he got robbed and conned by someone he considered a mate. Very unfortunate…

What happened to the Wiese-owned Southern View Finance and its R16b consumer debt book laundry scheme in this whole journal entry merry go round?

Did PwC not mention it?

PWC is highly unlikely to go up against Wiese. I note with amusement how they went out of their way to ensure they made it clear that Pepkor and the SA companies were ever so innocent. Maybe they should investigate the sale price of Pepkor to Steinhoff … many unanswered questions there. Or the debt book. Securitized to full capacity. Or pop a small eye over the companies that Wiese was previously involved in. Sorry Mr Wiese I personally do not buy the innocent plea. I wonder how long it would have perpetuated while money was syphoned offshore if the German authorities had not started looking into it ? SARS needs to wake up.

I would be interested to see what income from related entities (including the interest it “paid” on the book it bought on never-never terms) went through Southern View Finance tax calculation to offset the tax losses in it from the consumer debt book purchases cleanup for the group.

Hence the importance of rotating the auditors every 5 years.

Should the JSE and every other Stock exchange not have an Audit division that is entitled to scrutinise any Companies financials and/or their Auditors findings at any time. Do the JSE not have a responsibility to the public shareholders, who after all keep them alive as well. I for one am becoming increasingly skeptical and distrusting of the behaviour of the Management, auditors, and “punters” of listed entities and cannot we rely on the short sellers to keep it in check!!?? Unfortunately it is a case of “all roads lead to Rome”!! JSE seems to be way to soft on the fraud and mismanagement taking place, it’s getting a Ponzi and self enrichment feel about it!

Mr Weise I have some news for you ……all investors want their money back too! They were also lied to.

As investors in South Africa we would ask where else this thing happening.

Because it impossible that S.A. listed don’t have same things happening.

Christo Wiese has laid a huge claim as he will be the biggest claimant. This will give him the power to manipulate the process. His voting rights will no doubt give him a large enough majority to swing votes. A textbook case of leading the fight against yourself …..This is not all that unusual.

This is a pure diversion tactic… he is not interested in the money, he is more interested in ensuring he himself is not also sued

End of comments.

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