How Christo Wiese the rich dad of South Africa nearly became poor dad

PUBLISHED: Tue, 25 Jun 2019 14:25:38 GMT

Billionaire Christo Wiese says he was on the verge of losing everything in the Steinhoff scandal.

Wiese’s net worth plummeted, at the beginning of 2018, as the Steinhoff share price went into free fall. In March 2017, his net worth, according to Forbes magazine, was at $5.6 billion. Less than a year later it fallen to a mere $300 million. It had dropped so far that when CNBC Africa contacted the Forbes Wealth Unit in the United States to verify the net worth they thought it could be a computer glitch and asked for time for the technicians to check. When they came back the head of the wealth unit Kerry Dolan was astounded.

“This is the biggest and fastest drop we have ever seen in the real time net worth of any individual on the Forbes rich list,” Dolan said.

It could have been a lot worse Wiese told CNBC Africa in an exclusive interview at his Pepkor headquarters in Paarl, near Cape Town.

“I count my blessings because if this fraud had been allowed to go on for another year or two, I would have lost everything, including Shoprite. I decided not to become a bitter person because that destroys my life,” says Wiese.

The retail billionaire, who has recovered his net worth by extricating himself from Steinhoff to around $1.1 billion, according to Forbes, believes that culpable Steinhoff decision makers should feel the full might of the law.

“Everyone who has participated, and remember they have not been found guilty yet, in fact they have not even been arrested yet, which is also something that puzzles me. But everyone who has perpetrated this fraud should be made to pay,” he says.

Wiese also defended his decision to get involved with Steinhoff in the first place.

“I had businesses in more than 30 countries before I did the Steinhoff deal, let’s put that in perspective. I looked at Steinhoff and its widespread of interests, its apparent very strong balance sheet and a number of other factors. I thought that by putting these businesses together we could create what we called a prospective African champion. In other words a retail business that had become global, that was the vision for the business as a whole.”

Yet it all turned sour and Wiese says he faces a long legal battle for the chance of seeing a penny back from Steinhoff and admits it is going to be tough.

“I shouldn’t be paid first, I should be dealt with on the same basis. Today what is in Steinhoff 60 or 70% came from my companies of what is left in Steinhoff belongs not to shareholders but to Steinhoff creditors. That is how the legal system works and it is those creditors who will have to sit around the table and decide how the assets that are still in Steinhoff have to  be divided there is no way in the world any one of these creditors can be paid in cash, only paid in kind,” he said.

“I am putting in my claim with all the other claims, there are 182 banks, there are at least  I think, there are at least 16 other claimants that are in a similar situation to my company and we need to sit down and decide all these people need to sit down and decide how they will take the company forward or if they so decide to liquidate the company which will be bad because I think at the last count there are 100,000 people working in Steinhoff there are very valuable businesses in Steinhoff primarily my businesses that I sold to Steinhoff so it would be  a shame if that was the outcome but at the end of the day creditors have to make that call.

A legal battle that is likely to make even more headlines in the Steinhoff saga.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.