We woke up this morning to the news that Christo Wiese had lost 75% of his R58bn (that’s 58 000 million rand) fortune. He is now only worth a paltry R11bn. This all came about because of what appears to be some spectacular accounting principles applied by Steinhoff International, of which Wiese is a 23% shareholder. The second largest furniture retailer in the world, which is listed in Germany but essentially run by South Africans, has reportedly lost R160bn in market capitalization since Tuesday.

Notwithstanding the pure drama, the shock the horror and the “skinner” associated with this blockbuster announcement, there are no doubt thousands of ordinary citizens who have woken up to a similar devastating loss in their personal capacity. The Public Investment Corporation, which manages up to R1,8 trillion in primarily government employee pension funds, also took a beating, no doubt affecting many government workers pensions. They only lost R17bn. This is not dissimilar to the African Bank debacle of 2014, only on a much larger scale. I was one of the sorry souls who paid a hefty price for believing in ABIL back then. I was overseas on that fateful day on 14 August 2014 when the news broke. It turned out to be the most expensive holiday of my life.

Today’s new got me thinking, not for the first time, “what drives a businessman who is worth billions to obsess about making more money?” Step up to the podium please one Markus Jooste and his childhood hero Christo Wiese. In November 2015 Forbes estimated Jooste to be worth $400m. That’s R5,5bn at today’s exchange rate. At the peak of his empire building, Wiese had amassed an incredible R102bn. There are many others, both local and abroad, who are worth billions of real money (dollars). Some, like Bill Gates and Warren Buffet, who dwarf our local lads in terms of whose is bigger, are true philanthropists who opened their hearts and wallets to the poor masses. Others hang on for dear life and just get greedier.

What boggles my mind is the need to have so much money that you simply cannot spend it in several lifetimes. While all around us people are starving, have no shelter, utilities, jobs, or dignity. The way I look at it is as follows:

Let’s take the Wiese fortune on Monday 4th December. Around R58bn converted to dollars and we get to approximately $4,3bn. Or as I like to see it, 4 300 million dollars. Now, lets see what one can buy with that kind of loot.

1. The best private aircraft money can buy is the Gulfstream G650. Price $65m. So, we subtract 65 from 4 300 and we get $4 235 (four thousand two hundred and thirty-five million dollars)
2. Now let’s buy a couple of homes around the world. Drop $10m on an SA pad (R136m) and another $20m each in New York, London, and Paris. Oh, add one at $30m in Hong Kong for good measure.
3. We still have $4 135 million to go.
4. How about a super yacht at around $100m. We are down to $4 035 million.
5. Finally, lets get some wheels and buy a fleet of the top cars in the world. Assuming one buys the most expensive car in the world, the Aston Martin AM-RB 001 for a cool $3,9m in each city in which there is a home, that will be another $19,5m thank you very much.
6. And so down to our last $4 015 million.
7. Back to RANDS – R54 585m (fifty-four thousand five hundred and eighty five million)
8. The interest on this obscene amount at a miserable 6% per annum would be R3 375 100 000 each year or simply R8,9m a day.
9. OR If this rather wealthy individual and family never invested the money and managed to spend R1m EVERY SINGLE DAY it would take 149,5 YEARS to spend the money.
 
There is something terribly wrong with world economics in this sense. How is it that one individual or family accumulates so much that it is impossible to spend in multiple lifetimes, while most of the world’s population love in abject poverty? I am a capitalist. I work hard for my money and I live a comfortable life. I also give to charities and animal causes. But I do not understand why it is so necessary for ultra-high net worth people to keep chasing the bucks.  And in many instances, as we appear to be about to find out with Steinhoff, these people are not shy to create more and more wealth by being dishonest.
 
Workers in many Steinhoff linked companies get paid up to 1000 times less than CEOs. At Shoprite a worker MAY get R50 000 a year. The CEO Whitey Basson got R50m in one year. His golden handshake, albeit after 37 years of super profits for shareholders, was a staggering R1,8bn. WTF? There are gazillions of similar stats to bore you with. And don’t for a second get me started on the esteemed SA Govt drain on our economy through a combination of theft, corruption, greed and sheer stupidity. There are many villages searching for their lost idiots. The idiots are looting the country.
 
So between government and business in this country we are making a right royal cock up of every ounce of reputation and market confidence. Downgrade? We are going to get butt f%$*ed. And who can argue? Tired of greedy people, worn out by lies, lies and more lies and simply exhausted trying to figure out why filthy rich people want more, some at any cost.
 
Maybe there should be a ceiling on wealth creation in this world. God knows how one would enforce that. But how much is enough? 
 
 
 

Author

READ NEXT

Lawrence Twigg

Lawrence Twigg is a former retail and banking executive turned consultant and part-time cynical blogger.

Leave a comment