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Tekkie Town two in the wings

As the founder explores all options.

Braam van Huyssteen, founder of Tekkie Town and until recently chairman of the speciality division at Steinhoff Africa Retail (Star), has been busy. His company, AJVH Holdings, on Wednesday filed applications for three trademarks. This is the clearest indication yet that Van Huyssteen plans to create a competitor to Tekkie Town, the business he founded with R20 000 in 1989.

A consortium, that included Van Huysteen as the majority shareholder, sold 58% of Tekkie Town to Steinhoff in 2016 in exchange for shares. Steinhoff had already acquired the balance from private equity player Actis in 2015. Following a restructure of Steinhoff assets, Tekkie Town was unbundled into Steinhoff Africa Retail, which listed on the JSE in September 2017.

The rest is well-known history. The implosion of Steinhoff and collapse in its share price last December left the Tekkie Town vendors – along with thousands of other shareholders – holding paper that is now virtually worthless.

As a result, Van Huyssteen is pursuing multiple strategies in a bid to get back what he believes was wrongfully taken from himself and other former shareholders. He is the front man of a group of Tekkie Town vendors who have filed lawsuits in the Cape Town High Court against both Steinhoff (to reverse the original transaction) and Star (to have an earn out agreement honoured and recognised).

Van Huyssteen hinted to Moneyweb last week that he is planning to start a rival firm. This week he has taken this a step further, reserving the trademarks TT2, TTSquared and TSquared through intellectual property firm Adams and Adams.

“I am only 53, the rest of my team is even younger. If we go at a steady clip we will have what we had,” he says.

“We have registered the trademarks and we are young enough and passionate enough to build up a proper company,” adds Warren Erfmann, a former shareholder and non-executive director of Tekkie Town. “And that is without the added incentive of righting a wrong.”

However, Van Huyssteen must walk a fine line as this move will surely erode the legal processes described above, which are likely to grind on for the next several years.

“The legal process must play out. This entire deal is fraudulent and we want to be put back into the same position,” says Erfmann. “We have to be guided by what the law says. Our lawyers must let us know if we are wasting our time and money. They are of the opinion that we are doing neither.”

While the legal processes play out, informal talks have apparently been initiated between Tekkie Town and Star to discuss the possibility of the former shareholders buying Tekkie Town out of Star. For now the talks are being held at the Star level, despite the fact that Steinhoff, with a 71% shareholding, will have the ultimate say.

However, Jayendra Naidoo, chairman of Star, said that “there are no negotiations taking place regarding any transaction involving Tekkie Town”.  

Meanwhile Speciality CEO (and also Tekkie Town CEO) Bernard Mostert, has his head down in a bid to dodge the bullets above him and keep the company on an even keel. Last week he sent a WhatsApp to the senior executives of Star’s Speciality division that read: “Lots of bullets flying a level above us and lots of news guys. As always, our focus must be on the best outcome for the business. Ignore the noise and put the results on the board. Tough trading times as it is, so lets stay focussed and give them a superb asset to write and fight about.”

Mostert confirmed that he sent the WhatsApp but declined to comment for the story.

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Good luck with that Braam. I am still not sure why he is trying to be the victim in this thing… or am I wrong.

No court will entertain his claim for reversal of the business deal he agreed upon, and and he has no assurance or guarantee in his buy/sell agreement that reversal can happen under any circumstances including if the balance sheet was defect or fraud, no matter who did the fraud or who was responsible for it. A deal is a deal and he accepted the terms and conditions of the deal.
His best chance is just to join the shareholders class action for compensation, which will take years, and the compensation if it happens will be maybe around 10% of the losses, paid by Deloitte, ABSA, and/or the insurance of each board member of Steinhoff at the time.
After all he has made quite a lot of money working for Steinhoff, and he has no financial worries, unlike Steinhoff share holder that has lost huge amounts of money.

I agree. That is the risk of business. If the Steinhoff shares held steady, they would have been wealthy after waiting out the 3 years to sell the shares. Now that they lost, they run to the courts.

If someone bought your car with fake or undervalued gold coins, is the transaction valid?

Whaaaat! R3.4 billion for 58% of Tekkie Town in exchange for Steinhoff shares. At what earnings multiple was that?

In exchange for worthless shares that were not worth R 10.00 – Steinhoff’s management knew that their script was worthless hence the over valuations – see the trend? Steinhoff also overpaid for their European operations. I short Steinhoff acted “male fide” knowing all along that shares were issued for no value.

He knows his contract won’t play in court so he’s starting his new venture. Can’t fault him.

But shows that his claim is worth as much as a hi tec tennis shoe for old ladies. Exclusively at Tekkie Squared!

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