Court reserves judgment in Markus Jooste-linked Lodestone case

The high court has reserved judgment in a case brought by minority shareholders in Lodestone seeking an interim order to prevent Markus Jooste's Mayfair and others from selling their shareholding in the company.

The application – brought against Second Chapter Investments (SCI), Lodestone Brands, Mayfair Holdings, Mayfair Speculators, Standard Bank and four others – was heard in the South Gauteng High Court.

Four applicants are seeking an interim order preventing Mayfair and others from selling their shareholding in Lodestone in a "competitive sale process".  

The sale would result in Lodestone's minority shareholders also offloading their shares. But they allege that Mayfair is "in all likelihood scrambling to sell its shareholding in Lodestone through every means possible".

'Grossly unfair'

The applicants' lawyer, Chris Eloff, argued that Lodestone was "on a growth path" and forcing the shareholders to sell their stake would deprive them of cashing in on the firm’s financial growth.

"In five years the dividends would maximise. It’s now grossly unfair to force the applicants to dispose of their shareholding," said Eloff.

SCI is the majority shareholder in Lodestone (66.7%). SCI has two shareholders: Mayfair (78.37%) and SCI P1 (21.63%).

The court heard that the sale of shares had to take place before the end of the year, as Mayfair Holdings is hoping to sell Lodestone to help repay bank loans that were backed by Steinhoff shares that have since plummeted.

• READ: Parties to meet as Markus Jooste's Mayfair aims to 'offload' Lodestone stake

Eloff stated that his clients had substantial financial interest in the company and did not want to simply become employees under the owners. 

They wanted to be afforded a chance to match the highest bidding price in case the shares a sold through an open bid.

Another master?

"They say we don’t want to become an employee of another master. They want an open bidding process where they can match whatever price that is put forward," he said.

The parties maintain that the process of selling the shares through a competitive buyout is unfair and grossly prejudices their rights.

"The interim interdict is the only way of protecting our rights," said Eloff.

The lawyer presenting the companies, Leonard Harris, told the court that the company was within its mandate in seeking to buyout the minority shareholders.

Harris argued not all the minority shareholders were opposed to the buyout. 

"The other minority shareholders do not agree that this process is unfair," said Harris.

Only one shareholder is not opposed to the sale.

Judge Seun Moshidi reserved judgment in the matter.

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