Wiese to pay back merger cash
CHRISTO Wiese, Steinhoff International Holdings’ former chairman, says he received à325-million (R5 473-million) from the retailer last year as upfront payments related to a planned merger between supermarket chain Shoprite Holdings and Steinhoff’s Africa operations.
Steinhoff, which has lost 94% of its value since an accounting scandal erupted in early December, said that two payments made to Wiese in October and November last year did not follow correct disclosure or governance procedures.
That dragged the billionaire deeper into a crisis that has already ended the career of former chief executive Markus Jooste.
Wiese said he received two payments of à200-million and à125-million for shares in Steinhoff Africa Retail, known as Star, a step in the process of combining the unit with Cape Town-based Shoprite, in which Wiese is the biggest shareholder.
That deal collapsed shortly after Steinhoff reported accounting irregularities, so he agreed to return the cash, he said.
“Given the parties involved from Steinhoff’s side, I accepted that the requisite internal approvals and governance matters in respect of the sale agreement and payments there were complied with,” Wiese said.
The prepayment for Star shares was cleared by the Reserve Bank, he said.
Wiese quit Steinhoff in mid-December. He became its largest investor in 2015 when he sold his pan-African clothing retailer Pepkor to the company, though he has been forced to sell down his shareholding since the financial wrongdoing emerged.
He told legislators in January that news of the irregularities had come as a bolt from the blue and that he had no prior knowledge of any wrongdoing.
Steinhoff shares traded 15% lower at the close in Frankfurt. The owner of Conforama in France and Mattress Firm in the US moved its primary listing to Frankfurt from Johannesburg in 2015.
“Entities within the Steinhoff group concluded commercial agreements in October and November 2017 with Wiese-related entities. These transactions did not follow the normal governance and disclosure processes of the company,” Steinhoff said.
Moneyweb said earlier that Wiese had asked the company to cover a margin call on his behalf after Steinhoff reported the accounting irregularities in December. Wiese denied that aspect of the report by phone. —