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Billionaire Wiese takes billions in losses after cutting stake

Shares have plunged amid accounting irregularities.

Christo Wiese’s stake in Steinhoff International Holdings has been cut to about 6% after banks sold stock put up by the former chairman to secure margin loans, costing him billions of dollars in losses on the scandal-hit South African retailer.

The reduction in the shareholding from 20.52% was involuntary and he doesn’t know which lenders sold or who bought the stock, Wiese said in a phone interview Monday. That’s the last of the forced disposals, and he has no plans to sell down the stake further, the billionaire said.

Wiese has emerged as one of the biggest losers in a financial scandal that’s knocked almost 90% off Steinhoff’s market valuation, or more than 11 billion euros ($13.5 billion). The owner of Conforama in France and Mattress Firm in the US said in early December it had uncovered accounting irregularities and that Chief Executive Officer Markus Jooste quit. He was followed less than two weeks later by Wiese.

Wiese’s net worth has plunged to $2.1 billion from about $5 billion, according to the Bloomberg Billionaires Index. The scandal has also led to a fall in the value of a stake owned by the Public Investment Corporation, a manager of South African state-worker pensions. Banks including JPMorgan Chase & Co and Nomura Holdings have booked hundreds of millions of dollars of losses related to loans and the company’s share plunge.

Wiese, 76, became Steinhoff’s largest shareholder after agreeing to sell clothing chain Pepkor to the retailer in 2014, gaining about 20% of the company at R57 a share. Steinhoff closed at R55.81 on December 1, the working day before it said it wouldn’t be able to file audited earnings. The stock traded 2% lower at R5.82 as of 1:16 pm in Johannesburg on Monday.

Pepkor still contains value, Wiese said. The bulk of that business is now part of Steinhoff Africa Retail, a company spun off by the parent company last year.

The PIC is seeking a review of South African company voting-pool arrangements and new regulations covering large personal shareholdings, representatives of the state-owned company said at a hearing with South African lawmakers on January 31. The PIC also said it forced Wiese to resign from Steinhoff on December 15, after the then-chairman had briefly held an executive role to replace Markus Jooste.

The PIC’s stake is about 8%, according to data compiled by Bloomberg, meaning it’s leapfrogged Wiese to become Steinhoff’s largest shareholder. The money manager didn’t immediately respond to an email seeking comment.

Wiese was also at the hearing, and said news of the scandal came to him as “a bolt from the blue” and that he had no prior knowledge of any wrongdoing. Jooste has been reported by Steinhoff to South Africa’s anti-corruption police unit and hasn’t commented or been seen publicly since the scandal broke.

Steinhoff will have to restate its earnings for at least fiscal 2017, 2016 and 2015 and has hired PwC to investigate the accounting irregularities in more detail. In an emailed response to questions, the company said Wiese had notified the company of his share disposal, which was reported as 6.2% in filings he made to the Netherlands’ Authority for the Financial Markets on Friday.

Wiese said he’s currently holding 243 198 492 shares, which equates to a stake of about 5.7%, based on the amount of stock in issue.

© 2018 Bloomberg

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Dear Steinhoff where is the SENS announcement for this rather large sell-down of shares ? Last trade on the website was 98 447 130 on 14/12/2017, of which the sale represented only about 10 % of the shares held in September 2016

Haha …if you snooze, you loose..surely it was as clear as mud that he was going to sell most of this Furniture $hit shares?

If he sells at this price, does it mean he thinks the company is worth even less?

You guys must read more thoroughly and get your facts straight:
a) Christo Wiese didn’t directly sell off any of his shares in Steinhoff International NV;
b) Shares of Wiese that were sold off since Dec 2017 were involuntary sold as per contractual agreement by banking institutions self which held the shares as security on loan advancements;
c) These sell-offs were indeed covered in the press / MoneyWeb.
Wiese states that he is holding on to all his unencumbered shares in Steinhoff.
Don’t run away with self-inflicting innuendos and deductions that are not the real facts in this matter.

If he’s no longer a director, there’s no need for a SENS announcement?

Since when is it a requirement that a normal shareholder must comply to Sens announcements?

Christo has not been a Steinhoff Director since mid-December – hence no SENS announcement required!

…and, his shares were taken by Banks anyway, in line with ”share price” call levels in the loan agreements!

I think he only now began to understand the standard advice given by financial advisers that you should not own risky assets when you near retirement.

JZ and Weise are in the same boat – both negotiating to give up some of their power in exchange for no prosecution ….Last week must have been an interesting week for both of them!

Another PIC bailout methinks….in for a penny, in for a pound comes to mind! In the absence of a SENS announcment, does anyone know what shareprice Weise got for his sale this weekend?

How can that not be insider trading..? He was on the board recently: he has to know more than the market does about the current investigation?

Well this isnt looking too good… call me foolish but I think two years down the line Steinhoff will still be around, not in the same way it used to be but I really dont see Steinhoff completely collapsing. It will never be the giant it used to be but lets hope for R15 a share….one day…..

Hang in there!
Someone must have enough faith the execs to buy the shares

What if the bulk of the shares were sold at north of R50.How do we know he sold between R5 and R6 or am I missing something?

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