Jooste wins Lodestone case
Days after controversial businessman Markus Jooste claimed he had nothing to do with Steinhoff’s accounting scandal, the former CEO of the beleaguered retailer was handed a victory by the High Court in Johannesburg on Friday. The court ruled that his Mayfair Holdings investment company could sell its Lodestone Brands business using a mechanism that will force Lodestone’s minority shareholders to sell their shares.
Days after controversial business person Markus Jooste claimed that he had nothing to do with Steinhoff’s accounting scandal, the former CEO of the beleaguered retailer was handed a victory by the Johannesburg high court on Friday.
The court ruled that his Mayfair Holdings investment company could sell its Lodestone Brands business using a mechanism that will force Lodestone’s minority shareholders to also offload their shares. Lodestone’s brands include Rascals sweets and the Fusion range of dairy blend concentrates.
The ruling will help Mayfair to repay loans backed by nowcollapsed Steinhoff shares.
The founders of Lodestone’s three underlying firms, who are also its minority shareholders, went to court in a bid to stop Mayfair and Standard Bank, the appointed investment bank, from going ahead with the sale.
The applicants, who own about 22% of Lodestone, argued that Mayfair should either sell its shares without forcing them to do the same or should sell its stake to them at fair value.
Mayfair could also let them see the bids of interested parties so that they could match the bids and buy out Mayfair’s shares, they argued.
Friday’s ruling therefore means the founders will be forced sellers. The court dismissed their application for an interdict with costs.
In its argument, Mayfair said it probably would not have had time to sell its consumer goods unit by December as laid down by creditors, if the high court interdicted the process.
Leonard Harris, senior counsel for the respondents, told the court in June that since Lodestone’s memorandum of incorporation included a clause that allowed for the majority shareholder to launch a competitive sale process that roped in minorities, there was therefore no unfair conduct.
The founders told Business Day they were not yet sure whether the ruling could be appealed against.
Supplementary court documents show that 24 parties had expressed an interest in buying Lodestone, including Tiger Brands, Remgro, Long4Life, Premier Foods, Pioneer Foods and RCL Foods.
Jooste said in parliament on Wednesday that he had nothing to do with the fraud at Steinhoff.
He said he resigned on December 5 2017 because the group’s board did not accept his proposal that it immediately terminate the services of Deloitte as auditor, appoint a new set of auditors, and publish unaudited financial statements on the scheduled date.