Tekkie Metropolis’s co-founder and worn CEO, Bernard Mostert, sat down with BizNews founder Alec Hogg at the third BizNews Conference in the Drakensberg earlier this month. In 2016, Steinhoff sold Tekkie Metropolis from founder Braam van Huyssteen for R3.2bn; paying with Steinhoff shares that imploded the following year. Mostert opened up, sharing the goal details of South Africa’s greatest corporate fraud scandal.
Bernard Mostert on the establishment of Tekkie Metropolis and his relations to the founder
Braam founded Tekkie Metropolis and, for a few years, till 2013, he used to be the only real real owner of the trade. He borrowed R20,000 from his mother at the age of 23 and opened a retailer in Mossel Bay, which used to be a frequent sports activities retailer. I grew up in Mossel Bay and met him that year at the age of 13. I in actual fact comprise continuously appreciated golf as it has opened heaps of doorways for me in my lifestyles. I played for the metropolis’s golf group then. The map in which it worked in the Southern Cape is which that you simply can play foursomes in the morning in pairs and singles in the afternoon. Excellent a protracted time later, I realised what a threat and what a schlep it used to be for adults to comprise kids in golf groups… However Braam took me in and we played together for several years. My members trusted him to come and take care of me up at our residence on a Saturday morning and whisk off to Plettenberg Bay and Riversdale and fall me off but again at eight o’clock at night time. That is the attach our relationship started but it completely used to be handiest in 2011 that I joined Braam. He invested in a trade that I tried to gain off the bottom in 2006. In 2009, he acknowledged to me: “Hear, I will behold you’re making an strive in actual fact exhausting but I’ve purchased a rocket ship and a succession worry in my trade. I judge if you come right here, I’ll be in a role to supervise you better but you’ll moreover develop better in the lengthy time interval.” He turned out to be appropriate. I became fragment of the management group of Tekkie Metropolis. Braam used to be the most handy director of the trade till 2013 after I became the opposite director.
On launching Tekkie Metropolis as a shoes retailer
Braam is an unprecedented retailer, particularly from a payment-adjust level of view. He had constructed up reasonably of reserve and – in a yarn that has been informed many occasions – made an ailing-fated offer for 12,000 pairs of Caterpillars that used to be cancelled as an expose by Edgars. David Palmer, who to at the unique time is the Caterpillar agent in South Africa, approved the offer. It used to be R100 a pair and R250 at payment designate. He informed Braam: “That it’s likely you’ll perhaps perhaps sell the shoes wherever except for the attach Edgars is.” So, Braam despatched a gross sales pressure or chums into the rural areas and, three weeks later, your total shoes were supplied and he realised he used to be onto one thing else. Then, in 2000 after the Christmas purchasing and selling season, his mother convinced him to abandon all forms of other sports activities tools (cricket bats, tennis rackets and ping pong balls, and many others.) and acknowledged: “Appropriate focal level on the shoes in consequence of clearly that’s what you’re very appropriate at.” He then opened the most necessary retailer in the Somerset Trace Mart.
On Tekkie Metropolis’s Steinhoff wrestle
Steinhoff crossed our paths and used to be beautiful to us. Pepkor had a basket of corporations such as ours that used to be no longer performing optimally. The deal carried out with us used to be that we’d trade our controlling fragment in Tekkie Metropolis for shares in Steinhoff that would neatly be restricted for 3 years and our management group would take care of adjust of Pepkor’s speciality. At the commence, we would comprise damaged it out of Pepkor altogether as that used to be the dialogue. Then, after three years, we would be in a role to trade our shares and Steinhoff would pay us an create-out equal to 20% of the upside we created in that speciality trade on the closing day of the year. At that stage, we knew Tekkie Metropolis’s runway used to be roughly 550 stores in the nation. When we did the deal, we had about 220 stores in 2015. Taking stores in locations we belief were beautiful after which placing a exhibit of this community of hillbillies from George in tell of a trade and a higher platform. It then goes to a quiz about what we noticed and what we will have to comprise considered.
Markus continuously handled me with heaps of admire and he used to be unfailingly neatly mannered. Our deal went to the board of Steinhoff, the attach it used to be ratified, after which Markus insisted on an interview with Christo and Braam before our deal used to be carried out. One thing that befell – which I judge has no longer been acknowledged before – is that our fashioned deal used to be for R43.5m Steinhoff shares and Steinhoff would then give the liquidity to the actors. Two weeks before we were to shut, we purchased summoned to Stellenbosch and Markus wished to behold us. So, Braam and I tracked down there. Markus acknowledged unfortunately, he had to dwell on a undeniable fragment of our deal. It came as a surprise to us in consequence of we were on the verge of signing. He acknowledged it used to be handiest then that his group had brought him the salaries of the tip 5 members in the trade. He insisted we reduce the acquisition designate by 500,000 shares in consequence of he wouldn’t be in a role to interchange the management with salaries at that designate. He boxed Braam and me right into a role the attach we purchased elevated salaries but fewer shares. That used to be a spell binding facet to me in consequence of we many times comprise this neatly-liked yarn that he factual overpaid and used to be gay to gain the relaxation at this kind of designate. However then you definately had a 2nd love that.
Read moreover:
- Bernard Mostert on Steinhoff as court grants embroiled retailer depart to charm
- The Large Steinhoff settlement debate – Piet Viljoen and Bernard Mostert
- ‘We proceed to wrestle for what’s appropriate and we belief the system’ – Bernard Mostert on the Steinhoff settlement saga
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