Christoffel “Christo” Wiese is a South African billionaire who recently made a comeback after a four-year legal battle. In December 2017, Wiese was informed of a $7.4 billion accounting fraud at Steinhoff International, a furniture group where he was the largest shareholder and chairman. The fraud, which took place over nine years, resulted in a 90% drop in the share price of Steinhoff, Wiese’s most valuable asset. As a result, Wiese’s net worth plummeted from an estimated $5.6 billion in March 2017 to $1.1 billion on the 2018 Forbes list of Africa’s billionaires and eventually off the ranks altogether.
However, after a multi-year legal battle, Wiese settled for $500 million in cash and stock, and he is now back on Forbes’ 2023 list of Africa’s billionaires, tied at No. 18 with an estimated net worth of $1.1 billion. Wiese describes the discovery of the Steinhoff fraud as a huge shock, as it managed to get past all the gatekeepers, including internal auditors, external auditor Deloitte, the South African Reserve Bank, international banks, the South African and Frankfurt stock exchanges, and the rating agencies.
Despite this, Wiese had been alerted to concerns about Steinhoff as early as a decade before the furniture seller admitted its problems. In 2007, a 56-page report published by JP Morgan questioned Steinhoff’s earnings and financial disclosure. In 2009, Wiese had a meeting with an analyst who shared 40 slides about concerns such as Steinhoff’s inflated assets and low tax rate. In 2015, right before Steinhoff shifted its primary stock listing to Frankfurt, a German tax authority raised concerns about the company’s accounting. Despite these red flags, Wiese demonstrated supreme confidence in Steinhoff as a business and borrowed $1.8 billion from banks to purchase more shares in September 2016.
Wiese has since learned that he should have been more cautious, as he admits that he was only chairing four board meetings in the entire time he was the chairman of Steinhoff. He also acknowledges that the people committing the fraud managed to get through all the gatekeepers. However, Wiese is grateful for the lessons he has learned and is at peace with the world.
In conclusion, Christoffel “Christo” Wiese is a South African billionaire who made a comeback after a four-year legal battle. Despite being alerted to red flags about Steinhoff, Wiese demonstrated supreme confidence in the business and eventually lost billions of dollars due to the $7.4 billion accounting fraud that took place at the company. However, after a multi-year legal battle, Wiese settled for $500 million in cash and stock and is now back on Forbes’ 2023 list of Africa’s billionaires. Wiese is grateful for the lessons he has learned and is at peace with the world.