SHOPRIT: 22,052 0 (0.00%)
Wiese resigns as Steinhoff chairman in wake of accounting scandal
(Corrects Dec. 14 story to clarify Christo Wiese did not start
Pepkor in paragraph 8)
* Wiese's son Jacob also steps down
* Family resigns to reinforce independence of governance
* Heather Sonn takes over as acting chairman
* Banks sells portion of Wiese stake held as collateral
By Emma Thomasson and Tiisetso Motsoeneng
BERLIN/JOHANNESBURG, Dec 14 (Reuters) - South African tycoon
Christo Wiese resigned on Thursday as chairman of Steinhoff
, the latest setback for the retail group in the throes
of an accounting scandal.
Once a must-have for investors who backed its reinvention
from small furniture outfit into a retail empire, Steinhoff has
seen its shares crash more than 80 percent since last week when
it ordered an investigation into its accounts and parted ways
with long-serving chief executive Markus Jooste.
Steinhoff said Wiese, its top shareholder and chairman who
stood in as chief executive last week, had offered to step down
to reinforce independent governance and address any possible
conflict of interest.
Wiese has been chairman since last year and a board member
since 2013. He owns about 22 percent of the company, the stake
he built in 2014 when he sold his clothing retailer Pepkor to
Steinhoff via a combination of cash and shares.
Steinhoff named Heather Sonn, a member of the supervisory
board and its independent sub-committee, as acting chairperson,
and said Wiese's son Jacob had also resigned from the board.
The accounting scandal has tarnished the 76-year-old's
credentials as one of South Africa's most respected stewards of
It has also reduced his stake in Steinhoff: the company said
on Thursday that banks have sold 98.4 million shares they used
as security to lend Wiese 1.6 billion euros ($1.89 billion) to
fund the purchase of additional shares in Steinhoff in September
Wiese was one of the early executives of clothing retailer
Pepkor, which was co-founded by his parents in the 1960s in
Upington on the southern edges of the Kalahari desert, but is
best known for transforming grocery retailer Shoprite
from just six shops in the 1970s to hundreds of stores across
He was also instrumental in reinventing Steinhoff, turning
it from a modest distributor of furniture made in communist era
eastern Europe to a global household goods retailer, vying for
market share with the likes of IKEA.
But he suffered a setback this year when Steinhoff and
Shoprite, in which Wiese owns a 20 percent stake, called off a
deal in February to merge to create an African shopping giant,
preventing Wiese from bringing more of his retail assets under
His resignation comes a day after Steinhoff's second largest
shareholder Public Investment Corporation expressed discomfort
about possible conflict of interest in having Wiese as interim
Steinhoff, which moved its primary share listing from
Johannesburg to Frankfurt two years ago, has been under
investigation for suspected accounting fraud in Germany since
2015. Four current and former managers are under suspicion of
having overstated revenues at subsidiaries, prosecutors said.
Steinhoff has previously said that the investigation related
to whether revenues were booked properly, and whether taxable
profits were correctly declared.
($1 = 0.8480 euros)
(Reporting by Emma Thomasson; Editing by Susan Fenton)
First Published: 2017-12-14 21:22:19
Updated 2017-12-22 10:18:01
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