Markus Jooste. Picture: JEREMY GLYN
Markus Jooste. Picture: JEREMY GLYN

Markus Jooste’s investment vehicle is not acting unfairly by forcing the founders of its consumer goods company to sell their shares, the South Gauteng High Court heard on Friday. Judgment was reserved on Friday.

Jooste’s Mayfair Holdings is trying to sell Rascals-owner Lodestone Brands — through a mechanism that would force Lodestone’s minority shareholders to also offload their shares — to help it repay bank loans backed by now-collapsed Steinhoff shares. It has until December to do so.

However, the founders of Lodestone’s three underlying companies, who are also minority shareholders of Lodestone, have gone to court to stop Mayfair and Standard Bank, the appointed investment bank, from going ahead with the sale.

The applicants, who own about 22% of Lodestone, want an interdict to halt the process. They say Mayfair should either sell its shares without forcing them to do the same, or should sell its stake to them at fair value. Alternatively, it should let them see the bids of interested parties so they can match those bids and buy out Mayfair.

But Leonard Harris, senior counsel for the respondents, said that since Lodestone’s memorandum of incorporation (MOI) included a clause that allowed for the majority shareholder (Mayfair) to launch a competitive sale process, "there’s no unfair conduct". The applicants were bound by the MOI.

Harris argued that if the interdict was granted, the competitive sale process would be scuppered as Mayfair and Standard Bank would no longer have time to complete the sale by December.

Chris Eloff, senior counsel for the applicants, said the forced sale process led by Mayfair showed an "unfair disregard of the applicants’ interests". The applicants were founders of the underlying company and wanted to see out its five-year growth plan. It was unfair to force them to exit purely because of Mayfair’s "financial mess".

The court process was still underway on Friday afternoon.

Jooste resigned as a director of Mayfair and as CEO of Steinhoff in December after Steinhoff said it was investigating "accounting irregularities".