DURBAN - Steinhoff International is facing a torrid time as the Public Servants' Association of South Africa (PSA) and the Public Investment Corporation (PIC) announced yesterday they would pursue a class action lawsuit to recoup around R17 billion of pensioners’ money wiped out in the wake of an accounting scandal in December last year.
The PIC is the second largest shareholder in Steinhoff with an 8.5 percent stake.
The troubled retailer has seen its share price decline by 85 percent and R200bn wiped off its market capitalisation since it admitted to accounting irregularities last year.
PSA general manager Ivan Fredericks confirmed that they were going ahead with the claim. “We will be going ahead with the class action because it is clear from our side that there was a maladministration that took place at Steinhoff. It points to issues of bad corporate governance by the former chief executive Markus Jooste and some of the directors sitting at the board meetings with him being at the forefront of what went wrong in the group,” Fredericks said.
Steinhoff is also facing an investor backlash with the Deminor Group, a company that assists private individuals, corporations and institutional investors from across the globe with recovering their economic losses, which indicated that they were also in the process of recovering Steinhoff funds for institutional investors.
Edouard Fremault, a partner at Deminor Recovery Services, confirmed that that they had been contacted by institutional investors in both public and private pension funds and asset managers located across the globe, including South Africa, but also by retail investors based in South Africa.
“Our process of syndicating investors together is ongoing. Dutch law has some investors’ friendly provisions about the liability of the board of directors and the company when it appears that the financial statements contained misleading information. In the present matter, Steinhoff indicated that its 2015 and 2016 financial statements will have to be restated, meaning that past financial statements were not correct,” Fremault said.
The Deminor Group has five offices, which are located in New York, Paris, Amsterdam, Brussels and Milan. It consists of Deminor Recovery Services and Deminor Shareholder & Governance Services.
The group said its investment recovery cases were collective actions aimed at recovering investment losses in Europe and elsewhere. Based on the Dutch law investor friendly provisions, Fremault was confident that they would get a favourable outcome.
“We are, therefore, confident that investors may be able to recover damages from the company/the board of directors/the auditors, to the extent that they undertake appropriate legal actions in the Netherlands in a timely fashion,” he said.
Meanwhile, Steinhoff’s subsidiary furniture chain Conforama announced yesterday that it had reached an agreement with Tikehau Capital for a financing line of €115 million over three years. The deal comes two weeks after Conforama had agreed to sell a 17 percent stake in online fashion retailer Showroomprive.com to French supermarket retailer Carrefour for €79m.
Steinhoff shares lost 1.06 percent to close at R7.44 on the JSE yesterday.
- BUSINESS REPORT