You can also listen to this podcast on iono.fm here.
ADVERTISEMENT
CONTINUE READING BELOW
Download the free LiSTN audio app on Google Play, Apple or here.
JIMMY MOYAHA: It’s not often on a business show that you get insights from one of the best businessmen and entrepreneurs that South Africa has seen. We’ve got one such privileged conversation that we are about to have with a well-known South African businessman by the name of Christo Wiese. He joins me on the line now to discuss his latest ventures and latest developments.
Good evening, Mr Wiese. Thanks so much for taking the time. I guess we can start with the latest developments around the pursuit of the diamond business. This is something that isn’t necessarily new to you. It’s something that you had to put on hold 48 years ago to build a completely different business, and I suppose now is as good a time as any to pick it up.
CHRISTO WIESE: Yes. Well, I again started getting involved in the diamond mining business for the second time about seven or eight years ago. I was fortunate enough to acquire a son-in-law who was happy to join me in the venture and who is running it for us. It’s small in our lives. It’s still very small, but it has very substantial potential, and at least it creates employment. It creates opportunities for people, and it has the potential to become a very substantial business.
Read: SA Shoprite billionaire Wiese returns to his diamond-hunting roots
We primarily mine in the ocean, which is a fairly unique diamond mining situation because, as far as I know, there are only two major players in the world – an elephant and a mouse – the elephant being De Beers and the mouse being ourselves.
But it’s a difficult business to get into because the barrier to entry is very high. We are fortunate that we’ve been given very substantial ocean concessions, and we’ve got a nice fleet of vessels to do the mining.
JIMMY MOYAHA: Oom Christo, why ship mining at this point? You’re 82, you’ve accomplished everything a businessman can look to accomplish in life – building multiple listed companies – but clearly, you are not afraid to still take risk and look at and explore things that others might not want to explore. You mentioned already that this is in very difficult areas or has barriers to entry in this space. So then why do it? What inspires you at this point to continue doing it?
CHRISTO WIESE: Well, I believe one’s got to try to make a contribution or be active until physically you can’t do it any more. And I thank God I’m still physically in good shape. I could be in better shape – but am still in good shape – and I enjoy what I’m doing. I’ve wonderful younger colleagues. I’ve children who are interested and involved, and so I enjoy it. I come to the office for eight, nine hours every day and I enjoy every minute of it.
So the diamonds is just another business. It’s not necessarily riskier than others. I suppose it can be argued any mining operation, by its nature, has a high degree of risk, but risk is what it’s all about at the end of the day.
JIMMY MOYAHA: Speaking of successful businesses, I want to just take a moment to reflect back on the businesses that you have brought to us. You abandoned this mining effort in 1976 to transition into Pepkor – and we thank you for that because without that, I don’t know if we would have the size of Pep/Ackermans/Tekkie Town – and the Pepkor Group as it stands today. But alongside that, the Pepkor Group is such a big, profitable asset. Shoprite is a blue-chip retailer as well in its own right.
The Brait business is there as well, Invicta Holdings is there. The list is endless and I don’t know if there is someone who has listed more companies on the JSE than you have.
When you got into the space, when you started out with the Pepkors and the Shoprites with two or three retail stores, did you think that this is where this was going to end up?
CHRISTO WIESE: No, I don’t think any entrepreneur ever, ever does. People labour under the mistaken impression that founders or entrepreneurs who build large businesses – and, by the way, it’s never done by an individual, it’s done, in the case of Shoprite and Pepkor, by 200,000 other people – have some kind of blueprint and know exactly where they are and exactly where they are going to end.
That’s not how business works. I never thought when we first started with a few shops that we could develop into the largest retailer in Africa. That was never really an objective.
The objective was to build and to grow and to create opportunities, and to make a contribution to the economy and to the country in general. That was the objective. Thank God it worked reasonably well and a lot of people benefited hugely from it.
JIMMY MOYAHA: I suppose reasonably well is a modest understatement for having built companies that are now worth billions in market cap. Oom Christo, you did mention that, obviously, there is no blueprint to this sort of thing, and along with it there are some difficult lessons. I wonder if I could just unearth a very painful memory for you, and just reflect back on the happenings of Steinhoff? Obviously, hindsight being 20/20 is one thing. The other is of course everything that you would’ve put into that business and to those decisions. And giving up $2.5 billion of your stock in Pepkor to believe in this new venture, and all of the developments played out the way they played out. Obviously no one would’ve known that this would be the end result of it.
Read: Wiese offloads Shoprite stake worth R1bn
But when you reflect back on Steinhoff now, do you have any regrets or any decisions you wish you had made differently, and are you going after Lanzerac? Are you getting your farm back?
CHRISTO WIESE: Well, let’s just start off. First of all, at the time that I sold my stake in Pepkor to Steinhoff in exchange for Steinhoff paper, Steinhoff had a market capitalisation that was three times as big as my stake in Pepkor was. So I thought along with other people – who by that stage had invested a R100 billion into that company – that the company was real, that it was producing what the accounts were saying that it was producing. It had a strong balance sheet on the face of it.
Of course we subsequently found that the figures were cooked and that they were not real, and they had not been real for more than a decade. That fraud started happening early in the 2000s. It went through all the gatekeepers, as I’ve said a thousand times.
ADVERTISEMENT
CONTINUE READING BELOW
The banks, the auditors, the rating agencies, the JSE, the Reserve Bank – everybody was defrauded by the people who ran that fraud.
So I thought it was a wonderful opportunity to expand the Pepkor business. We already had substantial international businesses, but we could expand it more, and it just made an awful lot of sense on paper. The problem was that at the heart of it there was a massive fraud which nobody detected until the damage had been done.
And so a painful experience. I said in parliament that I lost an asset that took me and other people 50 years to build. But [that is] just one of the risks that one faces in the business world. More clever people than I have been defrauded for bigger amounts. These things happen. It’s sad, but one has to make peace with it and get on with your life – which is what I did.
And coming to Lanzerac, as you know, we issued summons against [former Steinhoff CEO Markus] Jooste a few years ago, and we are in the legal process of trying to recover it. But it is like all court cases, long and drawn out – but I’m confident that eventually I will get the property back.
JIMMY MOYAHA: It’s amazing that you can go through so much, like other shareholders went through, and still be as optimistic as you are and as adventurous as you are, continuing with business. A lot of businessmen in that situation might just call it a day and not want to move forward.
Oom Christo, can I get your thoughts on South Africa Inc at the moment? You’re in South Africa, you’ve seen many different shapes and colours and forms of South Africa. We’re now dealing with logistical and energy crises that we haven’t dealt with in this magnitude ever in the history of our democracy. Are you still bullish on SA Inc? Are you still optimistic around the South African story and the South African companies? We have really good companies and, like we said at the start of our conversation, leading that charge on the retail side without a doubt is Shoprite.
CHRISTO WIESE: Yes. Look, let’s just deal with those points one by one. First of all, if you cannot handle setbacks in business, you should never go into business. Go and find a steady job. And even there you’ll have little setbacks.
But setbacks are part and parcel of the journey through a business career. That’s the first thing. I was never going to roll over and die because of the enormous amount of money that Jooste and his colleagues cost me and other shareholders. So that was never an option.
The second thing is I could never understand the benefit of not being positive. How can it help you if, when we all know that the world is full of trials and tribulations, you get up every morning and think the world’s going to end? Then you may as well stay in bed. So thinking positively is just part and parcel of our DNA.
Coming to South Africa today, I don’t have to spell out to you the litany of woes, all the things that have gone wrong in South Africa, particularly in the last 15/16 years.
It is horrendous – what happened to our country due to gross mismanagement, corruption and theft. We all know it. Should that make us despondent? I believe not.
Because I just had an interview with a colleague of yours, and I made the point that I’ve often told people that I believe that countries, like people, are either lucky or unlucky. South Africa has proved over its centuries of existence that it is a lucky country.
I can give just one example among many. Look how lucky South Africa was that, at the right time, it had both a Nelson Mandela and an FW De Klerk in their positions. Can you imagine how the movie could have turned out if those two guys or one of them hadn’t been there at that particular point in time?
Equally today we sit in a situation where in many respects the government is simply failing. It’s not delivering what it should deliver. Thank God it is increasingly looking towards the private sector to help out with water, with electricity, with rail transport, etc.
We should be grateful that South Africa has a private sector that has the capacity and, as importantly, the willingness to step in and to help to make the country a better place for everyone and to create employment.
There are many countries that are not that fortunate. If you look at the disasters across Africa, one of the reasons is that for many decades, they did not have a substantial private sector. So we are lucky again.
JIMMY MOYAHA: Absolutely. I think I couldn’t put it better myself. Eternal optimism – even in the face of harrowing challenges and defeat. Thank you, thank you so much, Mr Wiese. It’s on your shoulders that young entrepreneurs in South Africa are able to stand and to believe, and we thank you for everything you’ve contributed towards a country like ours, a country that we all love to call home.
But we’ll leave it at that. I think that’s a good point to end off the conversation. That was the voice of Christo Wiese, who joined me to reflect on some life lessons in business, some thoughts on South Africa, as well as his eternal optimism.
