How SA’s richest could help us all
SOUTH Africa has 52 billionaires whose combined wealth of R334billion could solve several of the country’s money problems.
Think of Eskom’s R237-billion deficit and the #FeesMustFall higher education funding shortfall of R2.3-billion. Even if they covered the basic and higher education budget of R265-billion, these super-rich individuals would each be left with a cool R1.4-billion.
Topping the Sunday Times Rich List this year is businessman Christo Wiese, whose investment holdings wealth has ballooned by almost 200% over the past year to R104.8-billion.
Second place goes to Glencore’s Ivan Glasenberg with R24.9-billion, down from R61.4-billion last year.
Intu Properties’ John Whittaker manoeuvres into third spot with R23.4-billion, followed by Aspen’s Stephen Saad at R17.3-billion and Bruno Steinhoff at R16.4-billion.
Discovery’s Adrian Gore came in at No 12 with R7.2-billion and mining mogul Patrice Motsepe came in 18th with R3.8-billion — down from last year’s R11.8-billion. Motsepe is two notches above Johann Rupert, who has R3.5-billion.
Shoprite’s Whitey Basson is ranked 35th with R1.2-billion and trade unionists-turned-businessmen Marcel Golding and John Copelyn came in at 44 and 45 respectively with R1.1-billion each.
While not yet in the exclusive billionaires’ club, Sharon Wapnick, who has R665-million, and Woolworths Holdings’ Zyda Rylands, with R331-million, cracked the overall Rich List at 74 and 118 respectively.
Many of the rich do give to the needy. Motsepe helps to address the educational needs of the poor through the Motsepe Foundation.
Chris Gilmour, an analyst at Absa Investments, said: “Individuals . . . do a lot [but] the private sector is driven by the profit motive.”
Asked if the rich could help solve some of the country’s money crises, He said: “Just throwing money . . . isn’t necessarily going to [help].”
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A STRING of massive deals in the past 12 months put retail king Christo Wiese in the Rich List’s top slot, bumping last year’s winner, Glencore CEO Ivan Glasenberg, into second place.
Wiese did so well it would be fair to say that 2015 belonged to him. He didn’t just scrape into this year’s top position — he dominates the list.
His investment holdings, worth R104.8-billion, are more than the combined value of the next five people on the list.
The deal that guaranteed him the top position was announced at the end of last year. In what was then the largest South African deal — since dwarfed by the AB InBev acquisition of SABMiller — Steinhoff International acquired Pepkor for R62.8-billion. (Friday’s news of a raid by German tax officials on Steinhoff’s offices in that country takes some of the shine off Wiese’s sparkling year.)
Wiese exchanged his shares in Pepkor, a mainly South African and UKbased business, for an 18% stake in Steinhoff, whose manufacturing and retail operations stretch across Europe, the UK, Australasia and Africa. Wiese’s holding in Steinhoff now accounts for R56.5-billion of his publicly disclosed wealth.
His 35% stake in investment company Brait, which implements most of Wiese’s acquisition strategy, is worth R28.8-billion.
Then there’s Shoprite, the South African grocery retailer that has scored success abroad. Wiese’s 16% is worth almost R12.8-billion.
Given all this it was hardly surprising that Wiese was the first person to be awarded — in the same year — both the business leader and lifetime achiever awards this year in The Sunday Times Top 100 Companies awards. He was also inducted into the World Retail Hall of Fame this year.
Companies that built up asset bases outside South Africa, particularly in strong currency areas such as Europe and the US, did very well for their shareholders. The depreciation of the rand, in line with most emerging market currencies, ensured this was a winning strategy even if the underlying businesses didn’t sparkle.
Last year, Patrice Motsepe was the top-performing “all-South Africa” contender with the value of his effective 40% stake in African Rainbow Minerals putting him in fifth position with just over R11.8-billion. However, the sustained slump in mining knocked Motsepe’s wealth to R3.8billion, and 18th place, this year.
It wasn’t just South African mining that was hit.
Companies focused on doing business only or primarily in SA struggled. After years of attracting enthusiastic international support even the local retail sector lost its shine. Pick n Pay’s Ackerman family only managed to edge up to 11th position this year – from 14th last year.
The Glencore share would have to have surged more than 71% to secure Glasenberg’s position at the top of the 2015 list. It didn’t. Far from surging, the share was hit hard by the slump in China’s demand for commodities.
Glasenberg watched as the value of his 8.3% stake in Glencore more than halved, down from R61.4-billion in 2014 to R24.9-billion — but still valuable enough to secure the second spot.
Apart from a few Glencore executives and Motsepe, the only other sign of mining-related wealth in the top 50 was Desmond Sacco, who owns 24% of Assore, which mines manganese, iron and chrome ore. Sacco has dropped from 15th place to 24th.
The near absence of mining magnates in the Rich List top 50 should dispel lingering thoughts that South Africa is still a mining economy.
Inevitably, there will be a recovery in mining wealth. Once the Chinese excess of commodities is out of the system and the global economy shows more rigorous signs of growth, a new era of mining magnates will emerge.
Until then we will have to rely on the likes of Aspen and Naspers to break the dominance of finance and investment companies such as PSG, FirstRand, Remgro and Capitec, and their directors, in the top 100.