Steinhoff in hot water as former Tekkie Town owners ask for liquidation
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JOHANNESBURG - EMBATTLED Steinhoff International is in hot water again after former owners of Tekkie Town launched an urgent application in the Western Cape high court on Monday to liquidate the furniture retailer.
In court papers seen by Business Report Online, former owners of the footwear retailer said that in 2016, they sold shares to the furniture retailer for R3.2 billion. Then they received shares in Steinhoff that crashed when chief executive Markus Jooste resigned amid allegations of accounting fraud.
Tekkie Town’s former owners launched the application, citing that Steinhoff was unable to pay its debts; its liabilities exceeded its assets by such a margin that Steinhoff has lost more than 75 percent of its share capital.
According to the court papers, the footwear retailer launched various court cases over the years, saying it was “fraudulently induced” to conclude a contract. The terms of the contract were that they disposed of their interests in Tekkie Town to Steinhoff. The footwear retailer is seeking R1.86 billion back from Steinhoff.
The former Tekkie Town owners said that while the company was incorporated in the Netherlands, most of its business was conducted in South Africa, and the country’s liquidators should deal with the liquidation of the company.
The Steinhoff group had faced several claims and litigations against it, and as a result, Steinhoff has proposed a settlement of €943 million (about R16.4bn) to its claimants.
Its former auditing firm, Deloitte, has agreed to also contribute €77.94m, and former Steinhoff directors and officers contributed €78.1m to help settle claims against the group, but have said this was no admission to any liability or wrongdoing. The claimants were categorised as market purchase claimants and contractual claimants.
BUSINESS REPORT ONLINE