Double whammy hastens retirement of once richest South African

Steinhoff scandal and coronavirus pandemic have nudged Christo Wiese towards retirement.
Christo Wiese. Image: Bloomberg

Christo Wiese, who was once South Africa’s richest man, has swapped his office in an industrial area of Cape Town for a view of the Atlantic Ocean.

The corporate fraud at Steinhoff International Holdings that cost the 78-year-old much of his fortune coupled with the coronavirus outbreak, has convinced him to break the habit of half of a century and ease toward retirement.

“No doubt the change that was going to come anyway will be hastened by this Covid experience and also hastened by the Steinhoff nightmare,” he said in an interview. “The way I operate will certainly change.”

Wiese, the biggest individual shareholder in Shoprite Holdings, Brait and Invicta Holdings, earlier this year quit taking the 40 minute drive in his Lexus Landcruiser from his house in Clifton, the beach-front strip in Cape Town that’s among Africa’s most expensive suburbs, to minimise the risk of catching the coronavirus. Over the preceding decades, he had built Africa’s largest clothing chain, Pepkor Holdings, and Africa’s biggest grocer, Shoprite.

Wiese, the son of a farmer and gas station owner, joined Pepkor in 1967, two years after it started with a single store in Upington, a town in South Africa’s arid Northern Cape province.

Share swap

The pandemic accelerated a shift for Wiese that started two years ago, when Steinhoff’s accounting scandal almost wiped out the global retailer. In 2014, Wiese exchanged Pepkor for stock worth $5.7 billion in Steinhoff, becoming its biggest shareholder and chairman. Within weeks of the news of the financial irregularities that slashed Steinhoff’s share price by about 90%, he’d stepped down from the board and creditors had forced the sale of part of his stake. He has sued for R59 billion.

Its been a tough four years for Wiese, now valued at just $255 million according to Bloomberg calculations.

The Steinhoff blow came a year after Brait, the investment company in which he’s the largest shareholder, had plowed 1.6 billion pounds ($2 billion) into the UK on the threshold of its vote to quit the European Union. In less than six months, Brait’s shares plunged 44%.

Brait started a salvage process in November, announcing a sweeping overhaul that aims to sell assets over the next three to five years. The spread of the coronavirus has slowed those plans with the sale of its Virgin Active fitness chain delayed by as much as 18 months following the closure of gyms.

“In terms of the rejuvenation of Brait, this could not have come at a worse time,” Wiese said.

Steinhoff misery

The Steinhoff misery is also far from over. While Steinhoff is said to be close to reaching a potential deal on 10 billion euros ($11.6 billion) of legal claims lodged against it, a large part of Wiese’s suit is being challenged by a group of financial institutions, including Goldman Sachs Group, Citigroup, Nomura Holdings and HSBC Holdings.

That’s after Wiese secured a 1.6 billion euro margin loan from them in 2016 to participate in a Steinhoff equity raise to help pay for its acquisition of Mattress Firm and Poundland. Steinhoff shares were pledged as collateral.

He takes solace in his more successful ventures – the most prominent of which is a 10.2% stake in Shoprite. Before the coronavirus lockdown that began March 27 Shoprite had been taking a greater share of South Africa’s grocery market.

Wiese also adds the retailer’s social welfare efforts to his philanthropic resume. As the virus spread, Shoprite tripled its fleet of trucks delivering free meals o poor areas of Johannesburg and Cape Town to 27.

Wine supply

His smaller venture, Invicta, has started producing ventilators, oxygen helmets and a range of sanitisers and disinfectants. These will be sold across Africa from August and Wiese specifically sees this deal as a triumph for local manufacturing.

Still, his biggest joys are his afternoon visits from his grandchildren, who often storm in demanding chocolate, and the pleasure he gets from owning the 4 000-hectare Lourensford Wine Estate.

With South Africa having banned the sale of liquor as part of its measures against the coronavirus, “many wine farms are struggling,” he said. But, “at least in terms of personal supply,” owning Lourensford helps.

© 2020 Bloomberg

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Ha ha. I like the last paragraph on personal supply of wine during lockdown. I should build a pipeline to your cellars from Joburg. Imagine the profits I could make and don’t judge me.

Now Christo if you are reading this please write a book about your experiences. Oh and give talks to young vicious business dreamers like me. I can organize a few venues after Covid or Codi, this hooch is affecting my spelling.

Well done Christo. From Upington, man I wanna meet you in your cellar and try to stay alert while disposing of your wine safely during these difficult times.

You have a lot to teach us young wolves about life and business. Forgot that other derogatory name they call you, something about monotony or similar.

Enjoy being gramps. Tell those grandkids to go buy chocolate from your shops to keep it in the family. I envy you man. You should have stayed away from Jooste. But you are a tough one. You will make it.

Congrats for a life of business, hard work, mixed fortunes and family. Rest for you have worked. Jan here wants to rest without working. Retiring at 25. Ja wat.

The only skill he can teach is “sailing close to the wind”. He has been using innovative accounting for his whole career. He was the skipper, Jooste was a deckhand. If you sail close to the wind for too long, you become complacent and easily take on water when a previous business partner of German nationality rocks your boat. He was at the helm when Steinhoff capsized and Jooste jumped overboard. He is quite comfortable where he is sitting in his rubber dinghy (without a sail) at the moment, while the investors are drowning.

Exactly. Wiese is not business savvy. Just a bully that benefited from pre-apartheid rules.

Look towards jannie mouton and johann rupert as skilled business people.

Wiese is so incredibly dirty. No coincidence all his investments are down 90%. Enough of this guy. What has he actually done the past 25 years that was “skilled” or something a normal schmo could not achieve. He made only wrong moves.

I agree. Great anaology. Complacency and greed are the big lessons here. Also Wiese appointed Jooste. Jooste was his protege. Being a hands-on person, I don’t believe Wiese wasn’t aware of what was going on inside Steinhoff. All involved have dirty hands!

Yeah…..he must pack his ‘SUITCASE’ and retire 😉

Imagine being forced to eke out a living on only $255 000 000.
Too ghastly to contemplate.

No too much sympathy from my side.
People do not get this rich in retail without trampling on almost everyone and everything around you.

Methinks he protesteth too much – Bloomberg should have gone back to his days of acquiring OK Bazaars and how Pep Stores used to charge old age pensioners to encash their cheques at his shops in the hinterland.

When the tide goes out, you see who has been swimming naked. Many SA businessman from a bygone era (let’s just leave it at that) felt emboldened by false feelings of entitlement, privilege and superiority. But they clearly weren’t as smart as their arrogance and egos would have them believe… which is why the vast majority have failed when they ventured outside of SA… and now they even fail in SA…

You mean like Elon Musk and Mark Shuttleworth? Oh thats right, your envy missed the obvious counter facts to your nonsensical statement.

Tesla hasn’t shown a profit. It “made” money from selling environmental credits.

Shuttleworth was a one-hit-wonder, but at least he has used it for good.

Let’s talk about Standard Bank, Woolworths, Discovery,…. all got their arses kicked when there was a level playing field.

Apartheid damaged whites too; giving them a superiority complex unmatched by their abilities.

It is also those same individuals who built the economy that funds the social grant and salaries of SOE parasites with their sense of entitlement in the current era (let’s just leave it at that).

A person with $255 mill can hardly being called a failure.

The fat lady hasn’t sung yet. The claims haven’t been settled yet. The “margin call” is in the mail. He must share the emotions of the two bergies who stood in the queue to pay at Tops. They had a papsak between the two of them and they counted their coins as the queue moved forward. They were uncertain whether or not they could afford the wine, so they repeated the counting process. The one said to the other one: “Jissis, die stres!” (Man, this is stressing me out)

I think the man shares this emotion. I wish him the best of luck though.

He’s got more than enough to enjoy retirement.Sometimes you win, sometimes you lose.

Christo Wiese’s reduced wealth is relative – it’s not like he needs to come work in my garden in order to afford food.

He worked hard for many years, took risks and reaped the rewards…enjoy your retirement Mr. Wiese

Well we know he has some cash left, stuffed under mattresses in Europe

@mikeinCT – exactly my thoughts. Like the £600k he was caught smuggling out of Heathrow into Belgium!!! That money was returned back to him but it was never reported back to our lowly skilled SARS who are too lazy to check up on these happenings. In our day we used to scan the papers for untoward spending and behaviour and immediately do an audit – ala Dave King style.

Good leaders should be able to to be a good judge of character.

What happened with Christo and Jooste.

Anyone can make a mistake in judging someone’s character – Take for instance the ANC electorate…

Looking at all the negative comments here on a man, who has achieved a lot more than most, what is it with people who just can’t grant another man success? (Because in comparison, they feel inferior.) If someone did well, take your hat off to him, and say “Well done!”

Begs the question, “How did he do well?”

The term “ easy come, easy go” springs to mind. No one can get this rich in one generation ( other than in IT) without a bit of creative accounting and back handlers…..in my opinion. It’s exactly what politicians are doing in this country now….something they possibly learnt from behind the Boerewors Curtain!

A great business leader and a very nice person.
Enjoy your retirement, Christo, you earned it with shrewd investing and hard work. as for your trust in Jooste the old saying ‘ ‘n mak hond byt die seerste’ applies.

You must be part of Wiese’s PR team – hope your payment cheque clears

You are actually correct- by following the investments of dr.Wiese, Rupert and Jannie Mouton over the years paid handsomely. I made a small fortune off Pep and Steinhoff and did quite well off Invicta, small loss on UK branch out. My paycheck from Dr.Wieses investments runs into millions and all the cheques cleared.
If you are too uneducated nor stupid to do your own share transactions, and to take profits early, blame Christo Wiese. A typical have not, South African style.

Wiese’s main companies, Pepkor and Shoprite were build up step by step over many decades into excellent companies, with no whiff of any wrongdoing.

His business acumen failed him over the last ten years in places.

He would never have invested the bulk of his fortune in Steinhoff if he knew the accounting was crooked. He and the “expert” board is perhaps guilty of lack of oversight but not of participating in the fraud.

I’m not sure he knew about the Steinhoff nonsense before he invested but boy was he greedy. That came back to smack him. Thank God Whitey stopped him putting Shoprite into Steinhoff. Clearly not enough being a multiple dollar billionaire …

Seems jealousy does make some nasty. Enjoy your retirement and the fruits of your success.

No one only has wins and no failures as part of their journey to success and life. Rest well Wiese , enjoy your retirement or semi retirement.

The media over-hyping someone’s misfortunes, creating the impression he “lost it all” (in the desperate fight for advertising revenue)

Still USD 255 million in perspective = R4,2 billion ZAR

If I own 1/1000th of Mr Wiese’s wealth….i.e. a factor of 0,001 …or 0,01%…..I would have R4,200,000 ZAR. And that’s a workable retirement pot 😉

Merely the ebb and flow of business…you gain some & you lose some (ignoring the “how you got there” part)

On a technical point, he did not lose billions of euros, those values were as false as a pyramid scheme before it collapses.

Not sure when he went so wrong – maybe too many too-clever tax and corporate finance advisors compounded by his panic to externalise his wealth?

Looking at the comments, it is quite certain that very few of the commentators actually knows Wiese, has done business with him or has met him. I have grown up in the Northern Cape and although I have never met him, know a lot of people who do know him. Some admire him and some dislikes him. Some call him arrogant, other say he is a humble, polite man. Seems to be very much like most of us. Just human.
What I do know is that he did not inherit his wealth. He built his massive companies from more or less nothing. That must have taken some skill and determination. In spite of some mistakes, which cost a lot of us (me included) some money, his companies are still providing a livelihood to thousands of people, even the most Steinhoff people still have jobs. It seems to me that he has done more good than bad, so maybe the best thing will be to wish him a good retirement with his grandchildren.
And yes Mr Wiese, enjoy your Lourensford wine. Although I live about 10 minutes drive from your farm, I am not allowed to buy them!

$255 million might not be ‘enough’ for CW. He demonstrated that even the most successful accomplished businessmen are not absolved from blind greed. 2012 CW was well on his way….but it wasn’t enough for the man….and a shark like Markus Jooste saw, striked, and landed his ‘whale’

Now the sad CW has to contend to being a ‘when we’ fella, from $billionaire to $ Millionaire…….

I think that the comments will be somewhat different when Rupert decides to retire one day? That pretty much sums the man up.

End of comments.

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