Jooste and Wiese (and Rupert) prove the value of loyalty in business

Yesterday’s mega deal between Steinhoff and Pepkor was made possible through a deep friendship between the two super entrepreneurs who are combining resources to attack the global arena. It also proves the value of loyalty – a trait that runs deep in South African business, especially among Afrikaners. Remgro chairman Johann Rupert’s spirited attack yesterday against SA’s political leadership might be interpreted in the same vein. Rupert’s group owns a third of e.tv whose CEO Marcel Golding was ousted as a direct result, Golding says, of political interference. – AH

ALEC HOGG: Good morning. It’s Wednesday, the 26th of November. I’m Alec Hogg and here’s the Rational Perspective.

Let’s talk this morning about loyalty in business. It’s something that I feel very strongly about. I think that many other entrepreneurs are also of the same opinion. If you have a bank that’s loyal to you, you can do things. If you have partners who are loyal to you, well, you can actually conquer the world. And that’s what Markus Jooste is proving.

It’s a trait that runs deep in the Afrikaner psyche and I’ve seen this time and again with the Afrikaner business leaders; they seem to get along well with the people they’ve been with for many years. Once a friend, pretty much always a friend.

Yesterday, when I was talking to Markus Jooste in really lovely interview that we have on Biznews said that his relationship with Christo Wiese (a fellow billionaire entrepreneur in South Africa) goes back to 1982 when he was a young Chartered Accountant and did the audit at Pepkor. This is a company, which yesterday concluded a transaction with Jooste’s Steinhoff – the biggest corporate transaction in South African history – at R63bn. The two of them, – Wiese, who is now in his mid-seventies and Jooste, who is in his early fifties – are combining their resources to take on the rest of the world.

Steinhoff is already the second-biggest furniture group in the world. It’s now looking to become one of the biggest clothing retailers. So far, Markus said yesterday, with this combination they would be in the Top 10 in Europe. So they certainly are making an opportunity. But it goes back to that loyalty thing. They met in 1982. They’ve kept close to each other all the years thereafter. And now they’ve put their hands together to take on the rest of the world.

Interestingly enough, one of Markus Jooste’s closest allies is Jannie Mouton from the PSG Group. Again, loyalty playing a big role here. About 15 years ago, the two of them were drawn together after Mouton’s operation (PSG Investment Bank, as it then was), was a subject of a hostile takeover bid by Absa. Mouton was about to lose the business and in stepped Markus Jooste, supported him and of course, the friendship was cemented. They sit on each other’s Boards and are shareholders in each other’s companies.

Another issue of corporate loyalty, which is very relevant, is Rembrandt. The late Anton Rupert was very strong on this issue and his son Johann, hasn’t been far from that perspective, as well. However, many of us were a little concerned – and a little surprised, perhaps – that Johann Rupert was so quiet at the time that a long-time partner, Marcel Golding was ousted from e.tv because of political interference. Well, Marcel has gone very quiet after his departure (not surprisingly). Rupert and his Group own one-third of e.tv through a fairly complicated structure of HCI and Sabido. However, yesterday at the Remgro Annual General Meeting, Rupert – although not directly addressing the issue of Marcel Golding – did so obliquely when he laid into the South African Government, that it’s almost impossible now to defend the country to international investors on his tours,globally.

I remember Paul Harris, one of the founders of the FirstRand Group telling me that of all the people in the world he’s met, he doesn’t believe that there’s a single one who’s better connected,than Johann Rupert. If Johann is finding it difficult to support the South African Government’s current initiatives, maybe someone in Government should be picking up the phone to find out why.

 

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