When he talks, people listen; when he moves money, markets react and when he invests, many follow.  He is Christo Wiese, Africa’s third richest man after Aliko Dangote and Nicky Oppenheimer &amp; family, according to FORBES’ list of Africa’s 50 richest, and the creator of Africa’s largest retail store. He is ever busy as he adds to his $6.5 billion fortune, but his last investment raised a few eyebrows.
As we meet, Wiese is dressed in black pants and a black sweater; you may mistake him for an ordinary bloke on the street in Cape Town, South Africa. But, there is nothing ordinary about this man when it comes to business. His creation, Shoprite, earns revenue of $9.9 billion a year, at a time when retail is struggling. Steinhoff, the parent company of Wiese’s retail company PEP, brings in $11.8 billion. Combined, they net almost $2 billion in annual profits, operate more than 9,000 stores in 30 countries and employ over 200,000 people. He made his fortune from smart investments that earned him billions. So, why is he looking to venture into Africa’s glittering, but struggling, diamond industry?
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The family businesses, Cream Magenta 140 Proprietary Ltd. and Metcap 14 Proprietary Ltd., bought close to 50 million shares (23.54% each) in diamond company Trans Hex. This adds up to a dominant stake of just over 47%.
This isn’t entirely new territory for the risk taker. Wiese was in diamond mining in the late 1990s through an investment in Ocean Diamond Mining Holdings (ODM). He sold ODM to Namibian-based diamond miner Namco.
“I used to be in the diamond industry 40 years ago and the opportunity arose to acquire a controlling stake in Trans Hex which is one of the junior diamond mining companies and one I think has potential,” says Wiese.
The cold fact is South Africa’s once thriving diamond industry is suffering atrophy. It has no more than 200 diamond beneficiators remaining from a historical peak of about 4,500 and a decline in investment, according to Mining Weekly.
“Rough-diamond prices are too high for manufacturers, who cannot profitably polish goods at such levels. Polished-diamond prices have declined, in turn, reducing demand for diamonds from South African mines, as well as throughout the world,” it says, quoting World Federation of Diamond Bourses president Ernie Blom.
Trans Hex has not been immune. Their 2016 results suffered heavily from a sharp decline in rough diamond prices.
“The diamond market was severely impacted by excess stocks in the polishing industry and a resultant decline in demand for rough diamond. Average prices received for rough thus decline by 23.5% year-on-year. As a result, the Lower Orange River operations, which are earning the end of their reserves, moved into loss overall,” says Bernard van Rooyen, Trans Hex Chairman in the company financials.
Piet Viljoen, Alternate Director at Trans Hex, says its share price has come under pressure but the business has tried to ride the storm.
“The problem creates value in a very lumpy way. It earns a lot of money one year and then makes big losses the next year… so its share price doesn’t seem to go anywhere ever, that’s why it creates the impression that the business is under pressure,” he says.
Viljoen says it helps to have shareholders like Wiese who have vision.
“The shareholder reference can act as a provider of capital when the business needs it, do acquisitions or to fund projects.”
Trans Hex Group incurred a disappointing loss of R100.8 million ($7.3 million) and Viljoen has called it “a difficult year” but Wiese is optimistic.
“It is going well, except the exchange rate is not in favor of diamond exports because the rand is stagnant. With the diamond industry, you are not running a shop where you always know what your sales are going to be,” says Wiese.
Wiese is known for taking risks and smart investments. More than 60% of his wealth is in Shoprite and Steinhoff, while another 30% or so comes from his shares of investment company, Brait. His stock in Tradehold, a real estate firm, accounts for much of the remaining 10%. He has made investments in the United Kingdom (UK) such as clothing retailer New Look and gym chain Virgin Active. He says there is no secret behind the success.
“In this company, we have always had a philosophy, in terms of which we run our group of companies. These are the five pillars as we call it; faith, positive thinking, enthusiasm, compassion and hard work. Hard work is probably important but you’ve got to be a positive person and able to put teams together and motivate them. I am not a person running the business, I play a different role. The good business leaders like Whitey Basson and Markus Jooste are people who can put teams together, motivate them and steer them in the right direction,” he says.
There have been several enormous setbacks like the currency upset in 1985 when the rand lost about 50% of its value in less than a year, Brexit, which badly affected the share price, and great disappointments in people. It is wealth that hasn’t come easy.
“Oh yes, plenty [of bad investments]. I can’t even remember the worst one but there are many adventurous investments that just didn’t work out. I am heavily invested in wine farming and that’s not a very big lucrative business but it gives other pleasures such as the beauty of it…”
“A man’s true wealth is the good he does in the world,” goes the proverb. According to Wiese, success is more than how much money you have, it is about whether you can look at yourself in the mirror and say maybe it’s very small but my contribution made life or the world a slightly better place. Following this mantra, he is helping the poor gain title deeds to their homes. He is a sponsor of the Free Market Foundation, which is working with First National Bank to give people land tenure, and gave more than 100 title deeds to residents of Ngwathe, a municipality in South Africa’s Free State province.
“The Free Market Foundation looked at South Africa and found that there are between seven and 11 million households where the occupants own the structure on the land by they do not own the land, so they launched an initiative cooperating with the local, provincial governments to give people title to their homes. My family decided to get involved in that to make financial contributions in order to help people to acquire the title deeds to their homes,” he says.
“It is an enormously important thing for people to have a sense of ownership. People that are used to owning things do not realize how much it adds to a person’s dignity if he can say ‘this is my home. It may be a modest little home, but it’s my home and I can leave it to my children and be assured they have a roof over their heads.’”
Wiese says positivity rules his life.
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“If you are positive about life, you ignore the unfair criticism. A lot of the criticism is totally justified but you don’t focus on either the nice things people say to you or about you too much or equally you don’t concern yourself too much about the bad things people say…”
“I don’t remember anything bad people say. I always say to entrepreneurs, ‘if you start rising above the average, you become a target’. People say, ‘but that guy is not cleverer than I am, why does he make a success and I’m so clever and I don’t make the same financial successes?’ You have to know you will have people tear you down; it’s part of the game,” says Wiese.
We leave him preparing to jet off to the UK for meetings. Some may not understand his decision to dive back into diamonds, but Wiese seems to see money where others don’t.  Maybe the smart investor should take a look at the diamond business.

The Billionaire Diving Into The Depths Of The Diamond Business

From a confiscated briefcase at Heathrow Airport to being lambasted by the press over his business with the tax man, Christo Wiese has no airs about him. Only his gold Rolex watch gives you a glimpse of his wealth.
There is no doubt that Wiese is a formidable businessman, who has made a meaningful impact in the South African retail industry. As he sits in his boardroom—which is larger than his family’s first store—overlooking Industria, Cape Town, he’s either on the phone making arrangements, giving assurances or chatting to his broker. This is a far cry from his childhood in a small South African farming town, a place he calls an oasis.
Wiese’s father was a farmer and businessman in Upington in the Northern Cape, like many in his family before him, armed with basic informal schooling and his entrepreneurial spirit. Wiese is proud when he talks about how his parents never worked for anyone.
“I grew up in a household where that [entrepreneurship] was the way one approached life, which I found was a great benefit to me,” says Wiese.
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Wiese shows much affection towards his late mother, referring to her as a woman of great wisdom with a lot of drive, who had a strong influence in his life. She was a housewife who eventually owned her own business too.
Unlike his father, Wiese spent his last two years of high school at the prestigious Paarl Boys High school and moved to Cape Town to study further at UCT. After a year, he dropped out and moved back to Upington to join his father in business.
At 21, Wiese left Upington to study law at the University of Stellenbosch, whose alumni include some of South Africa’s wealthiest: Johann Rupert, Koos Bekker, GT Ferreira and Jannie Mouton. Wiese’s parents co-founded Pep Stores in 1965 and were its second largest shareholders. He worked for the company during his vacations, driving around the country with the major shareholder looking for locations to open new shops.
Wiese graduated in 1967 but returned to the family business instead of practicing law. There, Wiese dealt with administrative duties such as keeping minutes and updating share certificates. He got stuck in it and did what needed to be done.
In 1973, law came calling and Wiese practiced at the Cape Bar until 1979. During this time he bought a stake in a diamond mining company, the largest in South Africa not belonging to De Beers.
A businessman at heart, Wiese bought the controlling stake in Pep Stores from the founder in 1981, at the age of 36, and renamed it Pepkor Limited.
The decision to expand Pepkor’s footprint to Europe in the early ‘90s came about as Wiese realized that international brands would be coming to South Africa to compete with them. Once again, proving to be a savvy businessman, Wiese made the choice to take the competition to the rest of the world, with what he deemed a good formula that could be transferred to developed economies.
“We realized that as South Africa was opening up to the world, the world was opening up to South Africa,” says Wiese.
Pepkor’s business model is simple: high volume, low margin. If you look at the group’s history all the businesses follow this model except Stuttafords. The premium department store caters to the high-end customer and was a default acquisition when Pepkor bought Greatermans Department Stores in 1991. This was not the business the group wanted; their target was the Checkers supermarket chain, Stuttafords was sold a few years later.
Wiese’s Shoprite became the first of the group’s companies to expand into Zambia. The old OK Bazaar chain was bought from the government after being nationalized and run into the ground by the Kaunda government. The chain was rejuvenated and Pep opened in Zambia in 1994.
In 1999, Pepkor delisted from the Johannesburg Stock Exchange, at $331.4 million, after being listed for 27 years as Pep Stores. Pepkor had been approached by Brait, a private equity company, which advised them to delist. Brait proposed that Pepkor would do better at that stage as an unlisted entity. Following this, management acquired a substantial stake in the company. Brait owns a 37% stake in Pepkor. Wiese says the group, or parts of it, could be listed in the future.
Pepkor’s success has led it to have 
John Craig and Shoe City in its stable.
As cut-throat as business can be at times, those that are successful have spent years building and maintaining good relationships. Wiese and South African investment millionaire Jannie Mouton go a long way back. The two sit on the board of KWV Limited and Wiese used to sit on the board of Mouton’s PSG Holdings. Mouton has nothing but admiration for Wiese.
“I think what’s important is that he understands risk. He’s not scared to take risks. He believes in himself and he will back it, he’s not scared to raise money for a good business proposition,” says Mouton.
Wiese’s investment strategy is three pronged: get the best possible returns; invest in ethical businesses and remember that investing is a long-term game. This is the philosophy of the chairman of Pepkor, Shoprite, Tradehold and non-executive chairman of Invicta Holdings and Brait SA.
Tradehold is an investment holding company listed on the main board of the JSE, its main interests lie particularly in property in the United Kingdom, which is hoping to expand. Wiese owns around 80% of the company, with a market capitalization of around $137.5 million.
Invicta is an investment holding and management company with a market capitalization of around $770.6 million. The company controls and manages assets of $934 937 and finalized an acquisition in Singapore, its first outside Africa. Wiese owns around 37% of the company.
Wiese feels that the driving force of any entrepreneur should be to build businesses and help people develop. This, he says, is the true measure of success.
“The objective for people like myself is not to see how much money you can make because there’ll always be somebody richer than you. So what the heck?” says Wiese.
“I often say to people that I know a lot of people who’ve made a lot of money in different businesses, in different formats, with different styles but the one golden thread is that to make money takes decades.”
Pepkor is testament to this in its 57 years; Wiese has been part of 47 of them. As the man behind this growth, Wiese points out that it was a step-by-step process that had its ups and downs. His worst knock happened in 1985 when the rand collapsed. The company bled money, when the rand lost 50% of its value in a few months because of its significant dollar exposures. The balance sheet was under strain and the company had to be restructured. Shoprite was listed separately and some of the non-core assets were sold off. In one year, the company went from interest bearing debt of R140 million to having R110 million in the bank, at the time.
Getting out of a corner is something, Wiese says, only experience can teach you.
As a man who has done business across the continent for decades, Wiese calls himself a committed and optimistic African. He feels that Africa is shedding its old image; that a new Africa is emerging. He marvels at how people can still look at the continent with, what he calls, “old eyes”. He says that whenever something negative happens in Africa the “afro-pessimists”, as he calls them, turn it into a catastrophe but if the same were to happen anywhere else, it would purely be a setback. He considers the events at Marikana, where Lonmin mine strikes turned violent, a prime example.
Although Wiese is best-known for his business interests in retail, he has also tested other waters. Wiese was not looking to get into the hospitality industry when he bought the Lanzerac Wine Estate in 1991, on the outskirts of Stellenbosch. With a five star hotel on the premises, Wiese bought it as a new home for his family but as much as they loved the estate they loved their Clifton beach house even more.
Wiese chose not to walk away from Stellenbosch when his family did, simply because the place gave him too much pleasure. The wine estate was run down and the vineyards had been neglected for 25 years. But he saw something in it. Wiese spent a lot of money refurbishing the hotel, replanting the vineyards, building the cellars and developing the property. The magnificent 300-year-old estate was sold in 2012. The billionaire now owns Lourensford Wine Estate in Stellenbosch, bought in 1998.
On the rare occasions when Wiese isn’t too busy buying companies and making deals worth millions, he enjoys hunting, clay pigeon shooting, playing with his dog, catching up with old friends and spending the last three weeks of the year at his beach house.
None of this compares to his private game reserve in the Kalahari. Wiese always dreamt of owning a farm close to where he grew up but never spends more than two or three days at a time there. It’s his way of giving back through conservation, while running it as a business to keep it sustainable.
“If it pays and washes its own face and gives a little of a return on the capital employed, then it is sustainable,” says Wiese.
Wiese is no stranger to making headlines. In 2009, Wiese was stopped by customs official at London’s Heathrow Airport where he was carrying a briefcase filled with just over a million dollars. The money was confiscated and the matter went to court. Wiese insists that he acted on the advice that it would not be an issue. Wiese’s advocate stated that the money was less than what his client made in a week. The courts ruled in his favor and the money returned.
“It’s my money. I didn’t steal it from anybody. I didn’t defraud anybody. It’s my money and it’s certainly my right to do with it as I please,” he declares.
The media criticized the earnings of Shoprite CEO Whitey Basson, who topped the list of top earning executives in 2010, which was released by the Business Times. Basson earned more than $82.7 million that year but dropped in rankings to 20th the following year. He did however earn the largest bonus of $4,398,470 in 2011. Wiese counters that Basson is underpaid for the work he does and all he has produced for Shoprite’s stakeholders. Wiese says it’s too big a job for him to ever be tempted to do it himself.
Shoprite was bought in 1979 for R1 million, with fewer than 500 employees and eight stores. Basson was put in charge and the company is now Africa’s largest food retailer with a reported turnover of more than $9.25 billion for the year ended June 2012. Shoprite has a market capitalization of more than $23.23 billion and 2,033 stores across Africa, including the group’s subsidiaries. Wiese is the largest shareholder of Shoprite.
“I’m not an entrepreneur… You could best describe me as an entrepreneurial financer or investor,” he says.
But he understands entrepreneurs, which is exactly why he thinks so highly of Basson. He has brought others into businesses who are the opposite of Basson. These individuals, however, either didn’t grow the business or ran it down, despite their impressive credentials and promises.
In return Basson thinks highly of his boss.
“Christo Wiese is probably the most respected businessman in South Africa. He has the ability to dissect problems and opportunities without emotions or personal complexities. As non-executive chairman of Shoprite and a close personal friend we not only respect his judgments but also seek his advice,” says Basson.
Another painful media experience for Wiese was about his tax payments. He was reported as owing the South African Revenue Services, SARS, $274.905 million in unpaid taxes. While it’s unlawful to disclose a person’s tax affairs, he says that he doesn’t settle his legal matters in the press and that SARS has not dragged him to court regarding this.
“Personally I don’t have, as an individual, any taxable income because my income comes from my companies and that income comes from dividends, which are not taxable. If I owe you money, sue me,” challenges Wiese.
Wiese’s company Tradehold won a court case against the commissioner of SARS regarding additional assessment of $48,533,200 on the company’s capital gains in 2003.
This newsworthy 71-year-old billionaire is not looking to retire anytime soon. He wouldn’t know what do with himself if he did. He is, however, grooming his eldest son, Jacob (30), to take over the business. Wiese also hopes that both his daughters, one a non-practising lawyer, like her father, and the other a recent graduate from the London School of Economics, will join the family business someday.
“I asked Rob Walton, of the Walton family, whether their children are in the business and he said: ‘No’ and I said: ‘Well, what do you teach your children then?’ and he said: ‘We teach them to be responsible owners.’ And maybe that’s a good thing,” says Wiese.
The next 10 years for the Pepkor Group are said to be very much like the last 10: a continued high growth path focused on plugging into technology.

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