Wiese sticks to his guns as Steinhoff mess gets bigger

As lawsuits pile up against Steinhoff International — with banker GT Ferreira and Tekkie Town’s vendors joining the fray – former chairman Christo Wiese insists that he has a strong case against the embattled retailer.

The claims lodged by Wiese, Ferreira and Tekkie Town’s vendors add up to more than eight times Steinhoff’s value on the JSE.

Dutch investors have said that country’s laws would prevent Wiese’s R59bn claim from being upheld, since he had been a Steinhoff director when he invested in the company through Titan Group in 2015 and 2016.

“I would not have launched this action if I did not have very strong advice [to do so] and felt very strongly about it,” Wiese told Business Day.

“The point you’ve got to concentrate on is that the action has been brought in SA.”

Wiese said he had not been in contact with Steinhoff’s board, but was waiting for the board to file its defence against the summons he had served.

Steinhoff said it would “use all means and resources available to it to vigorously defend” against Wiese’s lawsuit, and also said it might reclaim bonuses paid to executives in the past.

It said on Thursday it had received demands from entities connected with Ferreira, amounting to about €100m, and from Tekkie Town’s vendors, claiming about €120m. Steinhoff will also have to contend with class-action lawsuits in Germany and the Netherlands.

Ferreira bought nearly 6million shares in Steinhoff in July 2015, four months before the group moved its primary listing from the JSE to Frankfurt.

Analysts say the latest claims could prompt other large shareholders to file similar lawsuits.

“If I was a big shareholder, and I’m not a shareholder at all, but if I was, the PIC [Public Investment Corporation] or Coronation, I think they’d be compelled to also lodge a claim,” said Opportune Investments CEO Chris Logan.

This was because claims by Ferreira and others would “detract from the pot”.

Steinhoff said PwC’s investigation into its accounts indicated that initial estimates that there was a €6bn hole in its nonSouth African balance sheet were understated.

The retailer said it would probably have to include “material additional impairments of intangible and other assets”, based on PwC’s initial work.

The group would include these additions in its results for the six months to March, which it planned to publish by the end of June. The results would include “an unaudited balance sheet for 30 September 2017”.

Although the company said its African unit would soon be free of debt, Steinhoff’s share price closed 3.9% down.

It also said it would investigate the roles played by those previously at its helm, without naming former CEO Markus Jooste. Steinhoff said it could not go on funding working capital with asset sales. It would meet lenders in London next Friday to discuss a restructuring plan.

“It is imperative that a restructuring plan is agreed with stakeholders as soon as possible to provide a more stable trading environment … and to allow management more time to focus on and assist the underlying business,” Steinhoff said.

Logan said it was “not surprising at all” that Steinhoff had to impair more assets. “The market is implying a negative value of R25bn on Steinhoff Europe, which is where the problems are … I think there’s a desperate tone in today’s statement about Europe.”