PRINT P1: Pepkor executives to go after Christo Wiese for Steinhoff damages
When Wiese merged Pepkor with Steinhoff in 2015, execs were asked to exchange their shares in the business for Steinhoff shares
A group of senior executives of Pepkor Holdings intends to seek compensation directly from the company’s previous chair, Christo Wiese, for damages they incurred as a result of the Steinhoff debacle, court papers filed last week show.
This was according to the testimony of Dawie van Niekerk, the previous chief operating officer of Tekkie Town, a business Pepkor acquired from Steinhoff in 2017.
Pepkor executives were asked, at the request of Wiese, to exchange their shares in the business for Steinhoff shares, when Wiese decided to merge Pepkor with the furniture retailer in what became the country’s largest merger in 2015. Some of these shares were held in a company called Business Ventures Investments (BVI).
The value of that investment collapsed as Steinhoff’s share price fell from approximately R55 before the revelations of accounting irregularities to as low as R1 in the months following December.
In 2018, Pepkor controversially provided a guarantee to banks that had lent money to BVI that was used to acquire more Steinhoff shares.
Pepkor was previously named Steinhoff Africa Retail (Star) before changing its name in June. It argued in papers filed in September in the Western Cape High Court that Van Niekerk and four other former Tekkie Town employees were in breach of their restraint of trade clauses in launching a rival, called Mr Tekkie.
All five individuals were executives and co-owners of Tekkie Town before agreeing to sell to Steinhoff in 2016. These include Tekkie Town founder, Braam van Huyssteen, and its previous CEO, Bernard Mostert.
In his brief responding affidavit, Van Niekerk describes how Pepkor executive Corné Klem approached him after a meeting in May to discuss the ongoing hostilities between Tekkie Town founder Braam van Huyssteen and Pepkor executives.
Van Huyssteen had just left his position as chair of Pepkor’s property division over a dispute regarding a bonus scheme he believes the Tekkie Town executives were entitled to, and which he says was agreed to by Steinhoff CEO, Markus Jooste, at the time he sold Tekkie Town to Steinhoff.
They intended to pursue its claim against Wiese directly.Dawie van Niekerk
Van Huyssteen had also instituted damages against Steinhoff regarding the sale, as he had been paid in Steinhoff shares that were now virtually worthless following the collapse.
“Klem intimated the old Pepkor management had a similar case against both Steinhoff and Christo Wiese, and that they intended to pursue its claim against Wiese directly,” Van Niekerk states.
But a director of BVI, Kobus Pienaar, speaking to Business Day on Friday afternoon, denies the account. “I can categorically state that BVI has not taken any action against Christo Wiese.”
Pienaar added that any decision to seek damages against Steinhoff would only be made following the release of the much-anticipated forensic report by PWC.