- Christo Wiese has won the first round of his case to compel Markus Jooste to return Lanzerac wine estate to him.
- A court has dismissed a bid by Jooste and Lanzerac Estate Investments to have the case thrown out before going to trial.
- Wiese has argued that Jooste tricked him into selling the estate for almost worthless Steinhoff shares.
- For more financial news, go to the News24 Business front page.
The Western Cape High Court has given business magnate Christo Wiese the greenlight to proceed with his lawsuit against his former Steinhoff colleague Markus Jooste to regain control of Lanzerac wine estate.
Wiese sold the historic wine estate outside Stellenbosch in 2012 to what was at the time described as a “foreign consortium” for roughly R220 million worth of Steinhoff shares.
Jooste and Wiese were briefly colleagues at Steinhoff until Jooste abruptly resigned as CEO in 2017 at the first signs of what was to become SA’s largest private sector fraud scandal. Wiese, then the group chairperson, briefly took over as CEO before stepping down a week later.
In 2021 he sued Jooste and Lanzerac Estate Investments (formerly Morpheus Property Investments), arguing that Jooste had tricked him into selling.
Wiese wants a court to cancel the contract and return the wine estate to him – or force Jooste and Lanzerac Estate Investments to pay him out what the estate is worth. In return, he would return the (now almost worthless) Steinhoff shares he received as payment.
According to Wiese, while Jooste said back in 2011 that he was merely representing a consortium of third-party investors, it was now clear that he was behind the deal from the start.
Wiese added that, when negotiations were underway, Jooste was aware that Steinhoff’s financial statements had been cooked.
Proceed to trial
On Friday, Western Cape High Court Judge Ashley Binns-Ward dismissed three arguments or “exceptions” put forward by the defendants to have the case thrown out.
The first argument put forward was that the terms of the sale contract meant Weise couldn’t seek to have it cancelled.
But Binns-Ward was unconvinced, ruling that a party can seek to cancel any contract if it is based on fraud.
The defendants’ second argument was that the sale couldn’t be reversed as Steinhoff’s shares had fallen precipitously in value.
READ | Ex-Steinhoff manager says ‘manipulator’ Jooste directed that accounts be falsified
Again Binns-Ward was unimpressed, ruling that Wiese could return any shares in Steinhoff as long as they were in the same class as the shares he had received.
The judge also shot down the third exception – that Wiese had failed to join one of the parties to the sale – Aussenkjer Boerdery – to the case.
What now?
The ruling means that the case can go to trial. No date has yet been set down for a hearing.
At trial, Wiese and Jooste will have to contend with the fact that Lanzerac was attached by the SA Reserve Bank last year in its case against Jooste.
In October last year, the bank swooped to attach cars, properties, art and more linked to former Steinhoff CEO, his wife Ingrid, and his family trust. It accused the ex-Steinhoff boss of breaking SA’s strict exchange control laws.
The SARB has not yet given an update on the case, saying it cannot comment on ongoing investigations.