Wiese stays active at Shoprite
Wiese said in an interview on Tuesday said that he had made it clear that he would continue to play an active role at Shoprite, even if the deal had been accepted by shareholders, because he would still have been the single largest shareholder.
Shoprite on Monday announced its proposal to buy out Wiese’s high-voting deferred shares for R3.3 billion, and convert them into ordinary shares. It received broad support from shareholders, but more than 15 percent of the minority shareholders had not accepted the transaction.
Consequently, it had been cancelled. Had the deal gone through, it would have reduced Wiese’s voting power at Shoprite to 17.8 percent from 42.3 percent.
The aim, from Shoprite’s perspective, was to simplify its voting structure and align it with global corporate governance trends.
Wiese said the Shoprite plan to convert his deferred shares had not been his initiative, but had been proposed to him by Shoprite management and its independent board.
He and the board had agreed on the less than 15 percent minority shareholder disapproval minimum to allow the transaction to go ahead, because he did not want other shareholders to feel prejudiced by the transaction.
“It was a very high corporate governance bar that had been set for this deal to go through,” he said.
There had been some criticism among market analysts of the proposed R3.3bn payment to Wiese for the share conversion, some of whom had argued instead that the shares were technically worthless.
But Wiese said the R3.3bn proposal had been determined as “fair and reasonable” by the auditing and accounting firm Ernst & Young.
Wiese said he was not upset that the transaction was not going ahead.
“Life goes on for Shoprite. It remains an excellent company, has outstanding management and there are great plans for the future, retaining its position as the largest retailer on the African continent."
Wiese controls 305.6 million deferred shares with 32 percent of Shoprite’s voting rights, which were issued to Wiese in 2000 at a nominal value of 0.1c a share.
His fortunes were severely dented with the collapse of Steinhoff 18 months ago, where he was once the biggest shareholder, and where he had been its chairperson for 16 months.
In April last year he issued a summons against Steinhoff for the R59bn (4.2bn) he had invested in it.
Wiese said he wrote a letter to Steinhoff’s new management advising them that the most sensible thing to do was sit around a table and reach a settlement. He agreed at the time to hold back on the lawsuit.
It was also important for all the parties concerned to realise that apart from any funds that might be recovered from possible fraud, “what is in the pot, is in the pot” at Steinhoff, as far as its ability to recover money for investors was concerned, said Wiese.
He believes that the Steinhoff companies have a viable financial future. “The real jewels” in the group were his old companies which he sold to Steinhoff, he said.
“This should not just be about the investors who lost money. The Steinhoff companies employ about 130 000 people who were depending on the future and stability of the companies. It appears it has taken almost 18 months for people to realise this,” he said.
He is no longer the major shareholder in Steinhoff, holding about 6 percent of the shares.
Commenting on his feelings when Steinhoff collapsed, Wiese said he does not suffer from stress. “I grew up in the Kalahari, and in that part of the world you won't survive for very long if you suffer from stress,” he said.
Wiese said what had upset him after the collapse of Steinhoff, however, was that some commentators had suggested that he and other non-executives must have known about former Steinhoff chief executive Marcus Jooste’s alleged financial mismanagement of the group.
“Do you really think that if I suspected Jooste of fraud that I would have invested R60bn into the company? The mismanagement occurred over many years, long before I became a shareholder.
"The financial affairs of the group had been inspected by many auditors, banks, market analysts and a host of other authorities. If they didn't find anything, why do you think I or any other non-executive director would have?” he said.
“Also, bear in mind that it took PwC with seven partners and, I’m told, 100 associates, 18 months to figure out what had happened in Steinhoff,” he said.