Why the fuss? asks Wiese

R1.8bn payout for Whitey Basson is still raising eyebrows but chairman says the row ‘escapes my understanding’

Christo Wiese, Shoprite’s chairman and its largest shareholder, seems flabbergasted by the outcry over the retail giant’s imminent R1.83bn payment to former CEO Whitey Basson in line with a buyback deal struck in December 2003.

“There appears to be this general misconception that this is something that was gifted to Basson,” he says. “These were his shares. If he had sold them through the market at any time during these 11 years, who would have raised anything about it?

“There’s no prejudice to Shoprite.

“I’ve looked at some of the commentators saying that Whitey Basson is now R1.8bn richer. In other words, in that person’s logic, the shares were worth nothing the day before Whitey put them. It kind of escapes my understanding.”

What has baffled investors, however, is the lack of disclosure in Shoprite’s accounts of the existence of such a “service contract” between the company and Basson, news of which came as a surprise to most when Shoprite notified the market of the buyback of 8.7m shares last month. The buyback is subject to a shareholder vote and Wiese confirmed to the Financial Mail that a circular will be issued in the next two weeks, with an extraordinary general meeting to be scheduled towards the end of August.

There’s no shortage of detail on Basson’s share ownership in Shoprite’s annual reports.