Steinhoff International Holdings took a 39 percent nosedive after the Western Cape High Court ruled that the liquidation hearing of the company could be heard.
Justice Hayley Slingers dismissed the opinion that the court had no jurisdiction to wind up the respondent.
“The point in time that this court does not have jurisdiction to limine (a limine is a motion, discussed outside the presence of the jury, to request that certain testimony be exclude) the respondent, being an external party, is dismissed with costs, which costs shall include the costs of two counsel and which shall be paid jointly and severally by the respondent, the first intervening party and the second intervening parties, the one paying to absolve the other,” said Justice Slingers.
The ruling means that the Tekkie Town owners can continue with the liquidation application, which was likely to continue on Thursday.
The former owners and management of Tekkie Town on Monday launched an urgent application in the Western Cape High Court against, amongst others, Steinhoff and its subsidiary Pepkor.
The liquidation application was brought by founder Braam van Huyssteen and the other previous owners of Tekkie Town, who claimed to have been duped to accept restricted Steinhoff shares in exchange for a controlling interest in Tekkie Town.
Van Huyssteen founded Tekkie Town and built it into a proudly South African footwear retailer.
The former Tekkie Town team sought to interdict and restrain the respondents from dealing with the shares of the Tekkie Town company or with the Tekkie Town stores and business in any manner that would prevent Pepkor or Steinhoff from restoring the vendors to their shareholding and control of the Tekkie Town business, before these were disposed of to Steinhoff.
They also sought an interdict that would prevent Pepkor and its subsidiary Pepkor Speciality from alienating, transferring, ceding, assigning or otherwise encumbering the shares in Tekkie Town, or the business trading as Tekkie Town.
The standoff between the two parties is a result of the December 2017 accounting scandal, which led to a more than 95 percent decline in Steinhoff’s share price following the admission to irregularities.
Steinhoff acquired Tekkie Town for R3.2 billion in 2016 from founder Braam van Huyssteen and former executive in exchange for Steinhoff shares. Tekkie Town owners in 2019 penned an open letter to Pepkor chief executive Leon Lourens saying they were trying to move on from the wreck of Steinhoff and the events of December 2017.
Tekkie Town management said: “In this process there is a role for truth, accountability and justice, but also for forgiveness.”
Steinhoff’s shares ended the day 21.62 percent lower at R2.90.
BUSINESS REPORT ONLINE