Home » South African tycoon Christo Wiese receives $463.1-million settlement from Steinhoff

South African tycoon Christo Wiese receives $463.1-million settlement from Steinhoff

by Omokolade Ajayi

As part of a settlement offer launched by Steinhoff International Holdings, South African businessman Christo Wiese received more than R7 billion ($463.1 million) in cash and shares in Pepkor, a Cape Town-based investment and holding firm.

According to Netwerk24, Wiese received around R3 billion ($198.5 million) in cash and a five-percent share in Pepkor worth R4 billion ($264.6 million) as part of a $1.62-billion settlement offer executed by a body called the Stitching Steinhoff Recovery Foundation.

The settlement is an attempt to reimburse individuals who lost money in the business when its shares crashed in 2017 as a result of an accounting crisis that resulted in the resignations of Markus Jooste and Wiese.

It also represents a significant step forward in settling long-standing litigation, as it prepares to resolve more than R122 billion ($8 billion) in combined claims stemming from its 2017 accounting debacle.

Wiese owned a majority 52-percent stake in Pepkor in 2014, but after examining Steinhoff’s long-term value prospects and potential as a worldwide retail business, the tycoon swapped his majority position in Pepkor for a 20-percent stake in the firm.

The accounting scandal, along with a series of inflated profits and asset values that later surfaced, caused the group’s shares to slump significantly on the local bourse.

As a result, Wiese and other Steinhoff shareholders lost more than 95 percent of their investment, prompting the tycoon to reduce his interest in the company from 20 percent to minority ownership of around 2.3 percent.

While the Steinhoff issue is nearing its conclusion, Wiese disclosed that he is waiting for the persons responsible for the accounting to be brought accountable in court.

“Those of us who suffered damage will exert pressure that the right things are done, and the new management of Steinhoff is deadly serious about pursuing executives who are involved or linked to the scandal,” he said.

As of press time, shares in the group are valued at R3.98 ($0.263), giving it a R17-billion ($1.12 billion) valuation.

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