Steinhoff denies wrongdoing
• Europe’s second-largest furniture retailer under pressure to counter allegations by former joint-venture partner
Just days before the listing of its R71bn African business, Steinhoff International remains under pressure to counter damaging allegations made by a former joint-venture partner.
Just days before the listing of its R71bn African business, Steinhoff International remains under pressure to counter damaging allegations made by a former joint-venture partner.
On Monday, Europe’s second-largest furniture retailer was forced to issue a statement denying wrongdoing in relation to its 2016 audited accounts.
The statement was prompted by news that the former partner, Andreas Siefert, joint-MD of German retailer XXXLutz, asked a Dutch court to order an investigation into Steinhoff International’s 2016 annual accounts. Siefert’s application is based on his allegation that Steinhoff did not properly account for the joint-venture nature of Conforama, which was acquired in 2011.
While Steinhoff International has acknowledged that Siefert was a joint venture partner in the France-based retailer of furniture and household goods, Siefert claims Steinhoff International’s 2016 accounts do not accurately consolidate the minority interest that he held.
Steinhoff CEO Markus Jooste said he was confident that the application would be dismissed by the Dutch court.
“The annual accounts of Steinhoff International were established according to all applicable rules and to our best knowledge,” Jooste said.
“The 2016 annual accounts are correct and received an unqualified opinion from our financial auditors.
“The allegations brought against Steinhoff are unfounded and rejected by Steinhoff.”
Siefert’s application to the Dutch court is part of his bigger battle with Steinhoff International over the way in which their joint venture arrangement has been handled.
According to German media reports, Steinhoff International repurchased part of Siefert’s stake, without his authority, on the grounds that he had violated his duties as a trustee and had not fulfilled his commitments. Steinhoff International said the dispute with Siefert was the subject of continuing legal proceedings and that it had made adequate provision for the related liabilities that may result from the court cases.
German prosecutors have joined the fray and are looking into the tax treatment of some of Steinhoff International’s recent acquisitions.
On Friday, Steinhoff International said it had raised R15.4bn in the private placement of 750million Steinhoff Africa Retail shares. The shares will be listed on the JSE on Wednesday.
The proceeds from the placement will help the group to cover any liabilities stemming from the legal action the company faces in Germany.
It will also help to compensate for the steep prices Steinhoff International has paid for a swathe of recent acquisitions.
On Monday, the Steinhoff International share price appeared to be unaffected by the latest development in its legal battle. It gained almost 1%, to close at R62.62.