Ann Crotty Writer-at-large
Christo Wiese. Picture: BLOOMBERG
Christo Wiese. Picture: BLOOMBERG

The sale of about 630-million Steinhoff International shares by Christo Wiese was "involuntary" and believed to have been forced on Wiese by his funders, which include global banks.

No details were provided, but in 2016 Wiese, who was the largest single shareholder in Steinhoff, pledged 628-million Steinhoff shares in collateral to borrow money from Citigroup, HSBC, Goldman Sachs Group and Nomura Holdings. Wiese used the money to participate in a share sale coinciding with Steinhoff’s acquisition of Mattress Firm and Poundland.

At the time of the pledge, the shares were valued at more than R80 each or about R50bn in total. They traded at about R6 during the past week, pointing to a multibillion-rand loss.

It is believed the banks did not have recourse to any of Wiese’s other assets, which suggests that the loss rests with them.

"Christo was always heavily geared. He got rich by gearing up on the back of his convictions; it’s great when it works," a trader told Business Day.

News that Wiese reduced his stake from 21% to 6.2% appears to have caused additional jitters in the market and nudged the Steinhoff share down 6.57% on Monday to close at R5.55.

At the end of January, Wiese said at a parliamentary briefing on the collapse of Steinhoff: "I have not sold a single share in the company since the day I first started to acquire them in 2011."

He said he could not say whether he believed the shares would recover some value as he was deemed to have access to insider information and would get into trouble. But he said that many analyst reports did suggest there was value in the shares at their current levels.

Because he is no longer a Steinhoff director, having resigned from the supervisory board on December 14, Wiese is under no obligation to make a public disclosure of the sale.

A spokesman for Steinhoff said the disclosure to the Dutch Authority for Financial Markets was in terms of the regulations where the company is domiciled. "The disclosure relates to a requirement for shareholders to inform the regulator if their holdings increase or decrease by a certain percentage — this notification is the responsibility of the shareholders," said the spokesman. However, it appears that the identity of the purchaser of the block of shares has not been revealed.

Public Investment Corporation (PIC) CEO Dan Matjila said it would have been strategic to sell the stake to a consortium of South African investors so that control could remain in South African hands. The PIC holds a 7.5% stake in Steinhoff and may be its single largest shareholder.

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