Phumelela CEO Quits as Racing Firm Suffers After Steinhoff

(Bloomberg) -- Phumelela Gaming and Leisure Ltd. Chief Executive Officer Rian du Plessis resigned from the South African horse-racing firm after 10 years at the helm and pledged not to sell any company shares for the “foreseeable future.”

The executive quit for personal reasons and will be replaced by head of international operations John Stuart, the Johannesburg-based company said in a statement Tuesday. Du Plessis is a close friend of Steinhoff International Holdings NV ex-CEO Markus Jooste, who sat on the Phumelela board before his abrupt resignation from Steinhoff at the start of the retailer’s accounting crisis in December.

“John and his team are really well armed and positioned to take the company to the next level. They have my full support,” Du Plessis said by phone message, declining to elaborate on his decision to quit.

Du Plessis’s departure comes after the company’s share price was hurt by the Steinhoff share collapse. Jooste’s horse-management company Mayfair Speculators Pty Ltd. was the second-biggest shareholder in Phumelela through an entity called Kalamojo Trading & Investments Ltd., and any company with links to Steinhoff risked being tainted by the scandal.

Phumelela shares have fallen 23 percent in Johannesburg this year. The stock declined 0.3 percent to 13.40 rand Tuesday. The company is due to report full-year earnings on Oct. 5 and those results will be presented by Stuart, the company said.

Mayfair is now insolvent and on the hook for almost 1.6 billion rand ($108 million) of defaulted loans. Du Plessis said in an interview last month that he first met Jooste when they studied together at the University of Stellenbosch in the late 1970s and they became close friends.

Although Du Plessis has been based in the U.K. for about 17 years, his ties with Jooste remain intact and he agreed to become a trustee of a Jooste family investment vehicle after his friend was forced to quit Steinhoff, he said.

Since Steinhoff’s accounting revelations, Du Plessis has used a little-known offshore vehicle called Lotus Good Investments Inc. to buy Phumelela shares 15 times. Lotus is Phumelela’s fifth-biggest shareholder and has a 3.9 percent stake, according to data compiled by Bloomberg. It’s wholly owned by Du Plessis’s family trust, the former CEO said in an interview in August.

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