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Jimmy Moyaha: It's not often that you get insight from some of South Africa's greatest businessmen and entrepreneurs on business shows. We are about to have this privileged conversation with a famous South African businessman named Christo Wiese. He joins me now to discuss his recent ventures and latest developments.
Good evening, Mr. Wiese. Thank you very much for your time. I think we can start with the latest trends in pursuing the diamond business. This isn't necessarily new to you. It's something I had to put on hold 48 years ago to build a completely different business, and I think now is a good time to start it.
Christo Wiese: yes. Well, I started getting involved in the diamond mining business again about 7-8 years ago for his second time. I am fortunate to have a son-in-law who is happy to join and run this venture for us. It's the small things in our lives. Although it is still very small, it has huge potential and will at least create jobs. It creates opportunities for people and has the potential to become a very big business.
Read: SA Shoprite billionaire Wiese returns to diamond-hunting roots
We primarily mine offshore, which is a fairly unique diamond mining situation. Because as far as I know, he's the only two major players in the world: the elephant and the mouse. The elephant is De Beers and the mouse is us.
However, it is a difficult business to break into because the barriers to entry are very high. We are fortunate to have significant maritime concessions and a fleet of excellent vessels for mining operations.
Jimmy Moyaha: Oh Christo, why do ship mining at this point? You're 82 years old and you've accomplished everything a businessman would hope to accomplish in life, including founding multiple publicly traded companies, but clearly you still take risks that others may not explore. You're not afraid to look and explore things you might not want to do. You've already said that this is a very difficult area or that there are barriers to entry into this space. So why do it? What motivates you to continue with it at this point?
Christo Wiese: Well, I believe that you should strive to contribute and be active until you are physically unable to do so. And I thank God that I'm still in good physical shape. It could be better, but it's still good. And I enjoy what I do. I have a wonderful younger colleague. It's a lot of fun because some of the children are interested in participating. I'm in the office for 8-9 hours every day and I enjoy every minute of it.
So diamonds are just another business. They are not necessarily more risky than others. I think it's safe to say that any mining operation is inherently risky, but at the end of the day, risk is everything.
Jimmy Moyaha: I'd like to take a moment to reflect on some of the successful businesses you've run. have brought us. You abandoned this mining effort in his 1976 and moved to Pepkor. We are grateful for that. Because without that, I don't know if the size of Pep/Ackermans/Techy Town and the Pepcor Group would exist today. But alongside that, Pepcor Group is a very huge and profitable asset. Shoprite is also a premier retailer in its own right.
We have a Brait business there and Invicta Holdings as well. The list is endless, but I'm not sure if anyone has more companies listed on his JSE than you.
When you entered this space, when you launched two or three retail stores with Pepcourse and Shoprite, did you think this was where you would end up?
Christo Wiese: No, I don't think any entrepreneur ever is or ever has been. People are founders and entrepreneurs who build large businesses, but by the way, it's never done by an individual, but in the case of Shoprite and Pepkor, by 200,000 other people. I am working under this false impression. We know exactly where they are and where they will end up.
Business doesn't work that way. When we first started with just a few stores, we never imagined we would grow to become Africa's largest retailer. That was never the real purpose.
Its purpose was to build the economy, grow it, create opportunities and contribute to the economy and the country as a whole. That was the purpose. Thankfully, it worked pretty well and many people benefited from it.
Jimmy Moyaha: I think that's quite an understatement considering he's built a company that is now worth billions of dollars in market cap. Oh, Christo, you said that obviously there's no blueprint for this kind of thing and there are some hard lessons that come with it. Could you please dig up your very painful memories and reflect on what happened at Steinhoff? Obviously, being 20/20 in hindsight is another thing. The other thing is, of course, everything you would have spent on that business and that decision. And I gave up my $2.5 billion stake in Pepcor to believe in this new business, and all developments unfolded as expected. Of course, no one expected it to end like this.
Read: Wiese sells R1 billion worth of Shoprite shares
But looking back at Steinhoff now, do you have any regrets or wish you had made a different decision, and are you planning on going after Lanzerac? Are you getting your farm back?
Christo Wiese: Well, let's get started. First, at the time I sold my Pepkor shares to Steinhoff in exchange for the Steinhoff paper, Steinhoff's market capitalization was three times as large as my Pepkor shares. So I, along with other people who had invested his R100 billion in that company by that stage, said that the company was genuine and was producing what the accounts said it was producing. I thought there was. On the surface, it had a strong balance sheet.
Of course, we later found out that the numbers were doctored, not real, and hadn't been real for over a decade. This scam started happening in his early 2000s. Like I've said a thousand times, it passed all the gatekeepers.
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Banks, auditors, rating agencies, the JSE, the Reserve Bank, everyone was fooled by the people who carried out that fraud.
So we thought it was a great opportunity to expand the Pepkor business. We already had a large international business, but expanding it further was possible and on paper made a lot of sense. The problem was that there was a massive fraud at the heart of it, and no one knew about it until the damage was done.
And I had a painful experience. I told Congress that we had lost the wealth that I and others had spent 50 years building.but [that is] It's just one of the risks you face in the business world. Smarter people than me are being scammed out of a lot of money. These things happen. It's sad, but one has to accept it and move on with one's life. That's what I did.
And then, coming to Lanzerac, you know, we issued a subpoena for. [former Steinhoff CEO Markus] Jooste was removed several years ago and we are in the legal process to get it back. However, like all litigation, this will be long and drawn out, but we are confident that we will eventually get our property back.
Jimmy Moyaha: It's amazing how you can go through so much and remain as optimistic and adventurous as other shareholders have. Many businessmen in this situation may think it's over and don't want to move on.
Oh Christo, could you give me your thoughts on South Africa Ltd at the moment? You've been in South Africa and you've seen South Africa in all its different shapes, colors and forms. We are currently facing a logistics and energy crisis unlike any other crisis of this scale in the history of our democracy. Are you still bullish on SA Inc? Are you still optimistic about the South African story and South African companies? We have really good companies and as I said at the beginning of the conversation, definitely on the retail side. Shoprite is leading the charge.
Christo Wiese: yes. Let's deal with these points one by one. First of all, if you can't stand setbacks in business, you should never go into business. Find a stable job. And even there you will experience small setbacks.
However, setbacks are inevitable along the way in a business career. That's the first thing. I was never going to flip out and die because of the huge amount of money that Jooste and his colleagues paid me and other shareholders. So that was never an option.
Second, I never understood the benefits of not being positive. We all know the world is full of trials and tribulations, but what would happen if you woke up every morning thinking the world was going to end? Then you can stay in bed. Therefore, thinking positively is just part of our DNA.
Having come to South Africa today, there is no need for me to go into great length about all the woes that have gone wrong in South Africa, especially over the last 15-16 years.
It is appalling what has happened to our country due to gross mismanagement, corruption, and theft. we all know that. So should we be discouraged? I believe not.
Because I just interviewed your colleague, and he emphasized that I often tell people that I believe that countries, like people, are either lucky or unlucky. Did. South Africa has proven its presence for centuries. lucky Country.
Here are just a few examples out of many. Look at how lucky South Africa were to have both Nelson Mandela and forward de Klerk in their positions at the right time. Can you imagine what this movie would have been like if those two, or one of them, hadn't been there at that point?
Similarly, today we sit in a situation where the government is simply failing in many ways. It doesn't offer what it should. Thankfully, we are increasingly looking to the private sector for assistance with things like water, electricity and rail transport.
We believe that South Africa has a private sector that has the capacity and, just as importantly, the desire, to actively intervene and support us in making this country a better place for everyone and creating jobs. should be grateful to.
There are many countries that are not so fortunate. If you look at the disasters across Africa, one of the reasons is that for decades there was no real private sector. So we're lucky again.
Jimmy Moyaha: absolutely. I don't think I could have expressed it better myself. Eternal optimism, even in the face of dire challenges and defeats. Thank you, thank you very much, Mr. Wiese. It is on your shoulders that South Africa's young entrepreneurs can stand up and believe. Thank you for all you have contributed to a country like ours and the country we all love to call home.
But let's leave it at that. I think that's a good point to end the conversation on. It was Christo Wiese's voice. He joined me to reflect on life lessons in business, thoughts on South Africa, and his eternal optimism.
