As shares of South Africa-based furniture retailer Steinhoff International, continues tumbling down, Shoprite owner Christo Wiese has sharply reduced his stake in the company from 20.52 percent to 6 percent.
A filing of the transaction was posted on the Netherlands’ Authority for Financial Markets website.
Steinhoff is currently facing an accounting scandal which started December 5th 2017 after it announced that it had uncovered accounting irregularities. The announcement contributed to crashing about 80% of the company’s share value, worth $14 billion. The accounting misinformation also meant that the company would have to restate its earnings for at least fiscal year for 2017, 2016 and 2015.
Christo Wiese’s divestment is seen as a lack of confidence in the company. Wiese selling his shares did not go down well with people who thought that he would still remain the largest shareholder after resigning as the chairman of the company in order to give room for further investigations.
“I find it strange that Christo Wiese would dump such a significant stake shortly after telling finance committee members just how much value there was locked up in his Steinhoff shares,” said David Maynier, the DA finance shadow minister.
“If Christo Wiese sold his stake, it would have been very strategic to sell to a consortium of South African investors to keep control in South African hands,” Dr Daniel Matjila, the chief executive of the Public Investment Corporation (PIC), told Business Report during the weekend.
According to a data compiled by Bloomberg, as of January 31st 2018, the managers of state-worker pensions in South Africa, Public Investment Corporation, are now listed as the largest shareholders with 7.5 percent stake in Steinhoff after Wiese.
The reduction is shares by Wiese comes about two months after he resigned as the Chairman of Steinhoff which he helped in transforming. Steinhoff was transformed from a small furniture company to a massive retail outlet that has over 40 brands in different locations.
From all indications this scandal has further reduced the net worth of the former South African billionaire and owner of Shoprite.