Christo Wiese. Picture: RUBAN BOSHOFF
Christo Wiese. Picture: RUBAN BOSHOFF

Christo Wiese, once SA’s richest man, has swapped his office in an industrial area of Cape Town for a view of the Atlantic Ocean.

The corporate fraud at Steinhoff International Holdings, which cost the 78-year-old much of his fortune, coupled with the coronavirus outbreak, has convinced him to break the habit of half of a century and ease towards retirement.

“No doubt the change that was going to come anyway will be hastened by this Covid experience and also hastened by the Steinhoff nightmare,” he said in an interview. “The way I operate will certainly change.”

Wiese, the biggest individual shareholder in Shoprite Holdings, Brait and Invicta Holdings, earlier this year stopped taking the 40-minute drive in his Lexus Landcruiser from his house in Clifton to minimise the risk of catching the coronavirus.

Over the preceding decades, he had built Africa’s largest clothing chain, Pepkor Holdings, and Africa’s biggest grocer, Shoprite. Wiese, the son of a farmer and petrol station owner, joined Pepkor in 1967, two years after it started with a single store in Upington.

The pandemic accelerated a shift for Wiese that started two years ago, when Steinhoff’s accounting scandal almost wiped out the global retailer. In 2014 Wiese exchanged Pepkor for stock worth $5.7bn (R96bn) in Steinhoff, becoming its biggest shareholder and chair. Within weeks of the news of the financial irregularities that slashed Steinhoff’s share price by about 90%, he’d stepped down from the board and creditors had forced the sale of part of his stake. He has sued for R59bn.

Its been a tough four years for Wiese, now valued at just $255m  according to Bloomberg calculations.

The Steinhoff blow came a year after Brait, the investment company in which he’s the largest shareholder, had ploughed £1.6bn into the UK on the threshold of its vote to quit the EU. In less than six months, Brait’s shares plunged 44%.

Brait started a salvage process in November, announcing a sweeping overhaul that aims to sell assets over the next three to five years. The spread of the coronavirus has slowed those plans with the sale of its Virgin Active fitness chain delayed by as much as 18 months after the closure of gyms. Brait has sold its stake in Iceland Foods and DGB, a SA wine producer and exporter.

“In terms of the rejuvenation of Brait, this could not have come at a worse time,” Wiese said.

The Steinhoff misery is far from over. While Steinhoff is said to be close to reaching a potential deal on €10bn (R193bn) of legal claims lodged against it, a large part of Wiese’s suit is being challenged by a group of financial institutions, including Goldman Sachs Group, Citigroup, Nomura Holdings and HSBC Holdings.

That’s after Wiese secured a €1.6bn margin loan from them in 2016 to participate in a Steinhoff equity raise to help pay for its acquisition of Mattress Firm and Poundland. Steinhoff shares were pledged as collateral.

He takes solace in his more successful ventures, the most prominent of which is a 10.2% stake in Shoprite. Before the coronavirus lockdown began on March 27, Shoprite had been taking a greater share of SA’s grocery market.

Wiese also adds the retailer’s social welfare efforts to his philanthropic resumé. As the virus spread, Shoprite tripled its fleet of trucks delivering free meals to poor areas of Johannesburg and Cape Town to 27.

His smaller venture, Invicta, has started producing ventilators, oxygen helmets and a range of sanitisers and disinfectants. These will be sold across Africa from August, and Wiese specifically sees this deal as a triumph for local manufacturing.

Still, his biggest joys are his afternoon visits from his grandchildren, who often storm in demanding chocolate, and the pleasure he gets from owning the 4,000ha Lourensford Wine Estate.

With SA having banned the sale of liquor as part of its measures against the coronavirus, “many wine farms are struggling”, he said. But “at least in terms of personal supply”, owning Lourensford helps.

Bloomberg

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