Where exactly was Wiese?
The chair’s absence from the AGM has triggered speculation that he may have been forced to address yet another crisis
Shoprite AGMS are invariably interesting events and this year’s was more interesting than usual. Not because of news of the exceptionally tough challenges the group is dealing with, or because even more shareholders voted against the remuneration policy.
This year’s AGM was fascinating because the chair, Christo Wiese, did not attend.
The absence of the chair at an AGM is rare; in Wiese’s and Shoprite’s case it is unprecedented.
Wiese has been chair of Shoprite since 1991. In all of that time not only has he not missed an AGM, he has not missed a board meeting.
This year he missed the AGM and the board meeting that was held immediately after.
Edward Kieswetter, who was appointed to the Shoprite board in 2010, stood in for Wiese and explained to shareholders that their chair had to attend another meeting that “he could not get out of”.
Analysts weren’t buying it.
While Wiese’s absence might have raised a few eyebrows in earlier years, the 2018 AGM was taking place almost 10 months after news of the impending calamity at Steinhoff hit him like a “bolt out of the blue”.
That bolt from the blue changed everything for Wiese, who had been a major shareholder in Steinhoff and its chair until forced to step down in January. This year has been a torrid one for Wiese as he has had to deal with problems on a growing number of fronts – multiple Steinhoff-related challenges and fires at Brait and Invicta.
“Wiese is chair of no other board that is remotely the size of Shoprite; this should be his priority. His absence raises lots of concerns,” remarked one analyst.
Wiese’s office confirmed he was unable to attend the AGM because of a long-standing commitment in London. This prompted one portfolio manager to point out that everyone knows Shoprite’s AGM is always on the last Monday of October, it’s a long tradition. “How did Wiese make a commitment that clashed with that?”
Inevitably, given the circumstances, Wiese’s absence has triggered wide-ranging speculation, including that he may have been forced to address yet another new crisis. “New Look recently announced it is exiting China — that might have started a fire,” suggested the portfolio manager, referring to the struggling British fashion group owned by Brait, an investment company in which Wiese holds a major stake.
He also pointed out that Wiese was forced to sell a large chunk of his Shoprite shares at the beginning of the year, and in June had to put in place a price-protection arrangement to cover the value of another 170-million of his shares, which had been used as security for earlier bank funding.
“It’s possible he can’t vote those shares without consulting the bankers. Given his significantly reduced stake, perhaps Wiese is no longer incentivised to attend meetings.”
Wide-ranging speculation was inevitable. Perhaps the Shoprite board should have been less coy.