Johannesburg - Lewis Group’s woes seem to be mounting with African Bank’s former MD, David Woollam, demanding that several of its directors be declared delinquent.
Lewis revealed this in a statement to shareholders on Wednesday.
Woollam’s letter, to Lewis’ board, demands that the listed furniture retailer start proceedings to declare its CEO, Johan Enslin, CFO Les Davies as well as non executive chairman David Nurek and non executive director Hilton Saven as delinquent in terms of the Companies Act.
Lewis says it has appointed “an independent sub-committee of the board to consider the allegations by Woollam levelled against the aforementioned directors, and having taken advice from Lewis’s legal advisors, it is Lewis’s intention to apply to court for the setting aside of Woollam’s demand... on the grounds that it is frivolous, vexatious and without merit.”
Lewis did not indicate on what grounds Woollam had written the letter.
However, its operating subsidiary, Lewis Stores, has been taken to the National Consumer Tribunal for alleged breaches of the National Credit Act (NCA) it said in April.
If found guilty, the outlet can be issued with a hefty fine.
Read also: Lewis’s earnings fall as credit sales drop
At the time, Lewis said the referral related to two alleged contraventions in how it dealt with its customers going back nearly 10 years.
The first charge related to costs charged by Lewis Stores under certain maintenance agreements concluded with its customers since 2007.
The second charge related to certain club membership fees, or “club fees”, charged by Lewis Stores to its customers since 2007. Lewis has said the charges are without merit.
Last year, the NCR alleged that Lewis Stores and Monarch Insurance had contravened the NCA by selling similar policies to customers they knew could not benefit. A week later, the troubled retailer came under a barrage of questions from shareholders and activists over its financial statements, bad debt and insurance policies.
At the Annual General Meeting, Woollam of credit lobby group Summit Financial Partners, queried provisions made by Lewis for impairments and warranties.
Shareholders also clashed with chairman David Nurek over attempts to stop them asking questions.
Read also: Slower economy hits Lewis’s earnings
“A greater proportion of the debtors’ book is poorly performing and is not adequately provided for,” Bloomberg quoted Woollam as saying at the meeting. “There is a gross misrepresentation of the financial statements.”
Lewis said these allegations were without merit.
IOL