Christo Wiese’s shares sale puts spotlight on corporate governance issues
Terms of the deferred shares structure means the shares are strictly nontransferable
On April 18 Shoprite announced a proposed transaction, the basic terms of which are that Shoprite chair Christo Wiese would dispose of his high voting deferred shares in Shoprite for R3.5bn. He acquired these shares way back in 2000 for 1c. While there are undoubtably benefits to ordinary shareholders if this transaction proceeds, these benefits must be weighed up against a number of countervailing factors. To Shoprite’s credit the transaction will be subject to shareholder approval and the lead independent director, Edward Kieswetter, who takes over as SA Revenue Service commissioner from May 1, has gone out of his way to engage with shareholders and ensure good corporate governance is applied. That said, the fact remains that while good corporate governance is now being applied it was poor corporate governance that created this problem two decades ago. In 2000, a complex pyramid structure was unbundled and Wiese was issued with high voting deferred shares. There appears to have...
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