Wiese is fooling no one, he is just looking out for himself
It’s been another torrid week for Steinhoff International, with the German-listed company’s shares trading at record lows and this week alone falling more than 16% as lawsuits continue to pile up. GT Ferreira, one of the founders of FirstRand — owner of FNB — joined the list of unhappy shareholders seeking justice after losing more than a billion rand from the collapse of the retailer in what’s the biggest corporate scandal in South Africa’s modern history. Braam van Huyssteen, the Tekkie Town founder and, I guess, now former horse racing peer of Steinhoff’s disgraced former CEO, Markus Jooste, is also suing for being duped into selling his company to Steinhoff. Of the many tales of corporate skulduggery in recent years, nothing comes close to Steinhoff in monetary terms. Whatever the outcome of the final restructuring plan, these plaintiffs seem to seek a claim on the assets of value, which basically amounts to its South African assets, Pep and Ackermans. Which is what Christo Wiese, the former chairman of the furniture retailer, wants as well, but I suspect there’s something else driving him.
What I understand by Wiese suing Steinhoff is that he is quite simply saying the company he was tasked with overseeing has misled him. It’s a startlingly similar logic to what we saw in politics this week when the North West premier, Supra
Mahumapelo, sent a resignation letter to himself as ANC chair of the province, only to then reject it himself.
As chair of the Frankfurt-listed company, Wiese, along with the board he led, sanctioned the activities of Jooste, who has been cast as the “lone and bad wolf”. Now, I am not going to cast blame and say the board simply had to be in cahoots with the gambler, but they sure didn’t play their oversight role, a dereliction of duty, even though they were being twisted by Jooste’s tongue. Why should we now believe that they too were mere victims like any other shareholder or creditor?
By suing Steinhoff, Wiese wants to switch the tale of the company’s collapse. His part changed from that of being a defendant from any possible future court case to that of being a plaintiff. From his actions, it appears the tale he wants to be sold is that he is but a victim, much like the farm workers on Ferreira’s Tokara wine estate who alongside their businessman boss lost their investments too.
As the company’s biggest shareholder, Wiese has been burnt quite significantly by the collapse of the company and there’s no doubting that. His reputation as the savvy investor with a nose for a good deal is also down the drain. But to say he should carry no blame for what obviously was a corporate governance meltdown on his watch doesn’t sit well, not with me.
As a country we are sifting through the debris caused by the near collapse of our state-owned enterprises such as Eskom, and there’s not a single director at the helm of these institutions who has escaped scrutiny and condemnation over the past decade. Chairpersons such as Dudu Myeni and Ben Ngubane can’t hide behind their non-executive status. Governance collapsed on their watch and a great looting was allowed. The wheels of justice turn very slowly in this country and maybe they’ll never get their chance before court to protest their innocence, but in their wilderness they’ll find it very cold and their reputations will remain in tatters. Wiese’s decision to sue Steinhoff, more than just being an attempt to get a seat when the board decides on its restructuring plan centering on what to do with Pep, is to avoid the fate of our disgraced executives at our state-owned enterprises.
As an aggrieved shareholder or creditor, who does one really hold responsible but the board itself? And in the case of Steinhoff, Wiese was the man in charge during Jooste’s tenure. As one of this country’s most well-regarded investors, he sure brought on many investors for the ride.
Wiese says his suit is meant to find the best outcome for all stakeholders. Among those stakeholders is Wiese himself, and being a plaintiff sounds a better deal as we continue to watch Steinhoff implode.
By suing Steinhoff he wants to switch the tale of collapse