Independent Online

Tuesday, June 28, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Steinhoff to appeal media houses access to its PwC report

Yesterday, Steinhoff outlined the reasons behind its decision to appeal, claiming the continued protection of the contents of the report remains necessary.

Yesterday, Steinhoff outlined the reasons behind its decision to appeal, claiming the continued protection of the contents of the report remains necessary.

Published May 23, 2022

Share

STEINHOFF International said it had decided to appeal against a court ruling ordering it to supply a copy of its PwC forensic report into accounting fraud to the media houses Tiso Blackstar (now called Arena Holdings) and amaBhungane.

“After due consideration and taking legal advice on the matter, Steinhoff has filed a notice applying for leave to appeal,“ it said yesterday.

Story continues below Advertisement

The Western Cape Division of the High Court of South Africa ruled on May 10 that Steinhoff must supply the media bodies with a copy of the PwC report within ten days.

The court had found that Steinhoff failed to establish that the report was protected by legal privilege in that Steinhoff already contemplated there would be litigation when the report was commissioned.

The media houses had argued that, even if a judge found that legal privilege was established, the report’s release was in the public’s interest.

Story continues below Advertisement

Yesterday, Steinhoff outlined the reasons behind its decision to appeal, saying the continued protection of the contents of the report remains necessary.

Steinhoff said it had initially instructed Werksmans to appoint PwC to act as an independent investigator and expert in regard to anticipated legal actions both by and against Steinhoff. In the ongoing litigation – principally recovery actions – Steinhoff continued to rely on the report.

“Steinhoff is prejudiced by the premature disclosure of the contents,” it added.

Story continues below Advertisement

Since the events of December 2017, Steinhoff said it had willingly co-operated with various regulators and enforcement agencies and necessary access to the report has been given by Steinhoff.

Similarly, these various regulators and enforcement agencies had an interest in the continued protection of the contents of the report.

In relation to the court ruling, on December 8, 2017 (three days after Markus Jooste, the former CEO, resigned), the Dutch Investors Association (VEB) had sent a demand to Steinhoff, which stated: "The VEB wished to enter into consultations with you regarding an amicable settlement, failing which the VEB considers it is free to take legal action against you."

Story continues below Advertisement

Steinhoff's grounds for appeal include that – the Court having noted the VEB demand – it overlooked the fact and effect of the demand, which Steinhoff contended was clear evidence that litigation was already contemplated when PwC was engaged a short time thereafter.

Similarly, Steinhoff contended that the court should have taken into account evidence presented by Steinhoff as to its intentions and the purpose for which PwC was appointed, and the role that Steinhoff intended PwC was to play.

Its share price slid 3.45 percent to R2.52 in intraday trade amid skittish markets. The shares have sunk 96.44 percent in five years as the company battles to regain its financial footing in the wake of the accounting scandal revealed in 2017, which led to it facing $3.4 billion (R53.6bn) worth of claims in its global settlement with shareholders who lost money.

Stichting Steinhoff Recovery Foundation, the foundation set up to administer the distribution of funds to claimants, had received more than 43 000 claims.

In February, the global retailer said in a trading update that its revenue from continuing operations increased by 10 percent for the three months to end-December, 2021, despite the reintroduction of Covid-19 restrictions in Eastern Europe.

BUSINESS REPORT

Related Topics:

Share