Christo Wiese: From billionaire to millionaire, as Steinhoff shatters his wealth #2020 in review

Christo Wiese was once one of the world’s richest men, but his involvement in Steinhoff ultimately led to his vast fortunes being wiped out. Bloomberg estimates his worth at around $255m – which is still very comfortable, but a far cry from his standing in the rich list earlier this decade. In 2016, Forbes described Wiese as one of the planet’s wealthiest people, with a $5.8bn fortune. “More than 60% of his wealth is in Shoprite and Steinhoff, while another 30% or so comes from his shares of Brait, an investment vehicle Wiese uses to buy other companies, many of them outside South Africa. His stock in Tradehold, a real estate firm, accounts for much of the remaining 10%,” Forbes reported at the time. In 2017, an accounting scandal erupted at South African multinational Steinhoff. The German authorities revealed they were investigating irregularities on a grand scale, prompting Steinhoff CEO Markus Jooste to throw in the towel. Steinhoff was a widely held share, so when its price collapsed, many investors felt the effects – including Wiese. – Jackie Cameron

Double whammy hastens retirement of once richest South African, Christo Wiese

By Janice Kew

(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 NV 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 Ltd., Brait SE and Invicta Holdings Ltd., 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 minimize 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 59 billion rand ($3.5 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 U.K. 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. Brait has soled its stake in Iceland Foods and DGB, a South African wine producer and exporter.

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

Christo Wiese: 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 Inc., Citigroup Inc., Nomura Holdings Inc. and HSBC Holdings Plc.

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 sanitizers 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 (9,884-acre) 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.

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