Markus Jooste stepped down as the CEO of embattled retailer Steinhoff amid an accounting scandal in early December
Allegations that former Steinhoff chief executive Markus Jooste is still a de facto director at Mayfair, or plays any role in decision-making or its management, are “unwarranted and baseless” speculation, his son-in-law Stefan Potgieter claims, in an opposing affidavit which forms part of a court application by some minority shareholders in Lodestone Brands.
The dispute is primarily between shareholders.
“I deny that Jooste has any dominance and power… or that Jooste considers himself as a puppet-master when it comes to the decisions of Mayfair,” states Potgieter.
These minority shareholders want to prevent Jooste’s Mayfair companies (of which Potgieter is a director) and others from selling their shareholding in Lodestone in a competitive sale process. Second Chapter Investments (SCI) is the majority shareholder in Lodestone (66.7%). SCI has two shareholders: Mayfair (78.37%) and SCI P1 (21.63%).
Jooste stepped down as the CEO of embattled retailer Steinhoff amid an accounting scandal in early December, causing the share price to tumble.
Gregory Senior, CEO of Mister Sweet, a division of Lodestone Brands and one of the applicants in the case, alleges that the majority directors are, by virtue of the multiple directorships and interest they have, conflicted when it comes to making decisions as part of the Lodestone board in respect of the competitive sales process.
WhatsApp
Potgieter confirms in his opposing affidavit that on February 15, 2018, Jooste sent a WhatsApp to Shaun Bruyns, a director of Lodestone and SCI.
The WhatsApp read: “Hi Shaun, I am so devastated to be informed that you and John after what we did/had together are trying to do Mayfair in behind their back…after what I did for you…Shaun think very careful what you are trying to do…that is not how partners behave when one has a temporary problem…I would never ever have expected that from you…” (sic)
Senior alleges in his founding affidavit that Bruyns felt “threatened” by this message, and for this reason was willing to ensure that SCI P1 would waive its rights to a deemed offer under the SCI Memorandum of Incorporation.
Potgieter regards this allegation of Senior as being “self-serving” and being denied by Bruyns.
“Bruyns determined the appropriate course of action for SCI P1 based on what he considered to be in the best commercial interests of SCI P1. He did so independently of and without consideration to Jooste,” states Potgieter.
Potgieter claims Senior, via Cadence Capital, was attempting to orchestrate his and other applicants own take-over of Lodestone via SCI P1’s exercise of its deemed offer rights.
Potgieter says he cannot speak for why Jooste sent the WhatsApp message to Bruyns, but says Bruyns has confirmed it did not affect him, nor the other directors of SCI P1, in their decision to waive their deemed offer rights under the SCI shareholders agreement.
“This decision was taken for commercial reasons,” states Potgieter. A supporting affidavit by Bruyns states that he agrees with all Potgieter says in his opposing affidavit.
‘Designed to intimidate’
In a supplementary affidavit in response to Potgieter’s opposing affidavit, Senior says he “persists” that Jooste’s WhatsApp message – one day after management sent letters to Mayfair and SCI – “was designed to and did intimidate Bruyns”.
“My concern lies against the backdrop of the substantial indebtedness owing to Mayfair by SCI P1, coupled with the timing of the message and Bruyns… changing of strategy in relation to no longer supporting the management buyout and ‘jumping ship’ in support of SCI and Mayfair,” states Senior.
He says Bruyns and one other respondent, through SCI P1, owe Mayfair R160m. Senior alleges that this, coupled with Jooste’s WhatsApp message, impacted on their decision-making regarding what is in Lodestone’s best interest.
“Bruyns (and the other respondent) have indicated their concern with this debt owed to Mayfair…” states Senior.
“They were both fully prepared to invoke the forced sale mechanism against SCI and acquire the interest in Lodestone at a discounted value.” The forced sale mechanism is what the applicants in the case prefer.
Senior regards the WhatsApp to Bruyns as demonstrating Jooste’s interference in the affairs of Lodestone – and even Mayfair – where he is no longer a director.