Shoprite's long time chairman Wiese steps down under pressure from board, shareholders
JOHANNESBURG, Nov 15 (Reuters) - The chairman of South
African grocery giant Shoprite, Christo Wiese, stepped down on
Friday after nearly three decades at the helm, giving into
growing pressure from investors and the firm's board which
wanted to dampen his influence.
The investors and the board were keen to simplify the
company's structure following high-profile corporate governance
failures at a clutch of South African firms, the most notable of
which was a $7 billion accounting fraud at furniture retailer
Steinhoff, where Wiese was also chairman and a majority
"The Board is of the view that, in line with good corporate
governance, the next Group Chairperson should be independent, a
view supported by Dr Wiese," Shoprite said in a statement.
Earlier this year, Shoprite's board attempted to buy back
deferred shares held by Wiese in an investment vehicle.
The scheme, which ultimately failed to secure enough
support from shareholders because of the high cost -- an
expected one-off reduction in earnings of about 3.3 billion rand
($223 million) based on the share price at the time -- would
have significantly curbed his influence in the company he helped
turn into an African powerhouse.
The Johannesburg Stock Exchange (JSE) has also been
tightening its corporate governance regulations, shining the
spotlight on Wiese's role as Shoprite's chairman and majority
In 2017 Wiese pushed for a tie-up between Shoprite and
Steinhoff that would have created a multi-billion dollar African
retail giant but shareholder opposition and regulatory hurdles
scuppered the plan.
Wiese in 2018 filed a $5 billion lawsuit against Steinhoff
to claw back a 2016 capital injection he made to help the firm
pay debt and fund the acquisition of the U.S. company Mattress
Shoprite continued to show its ability to weather economic
downturns, with quarterly results last week showing it managed a
7.3% rise in revenue as shoppers turned to its discount unit
($1 = 14.8839 rand)
(Reporting by Mfuneko Toyana; Editing by Kirsten Donovan)
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