Share­hold­ers clash with Lewis board

CityPress - - Business - – Bloomberg

Lewis Group’s board faced a bar­rage of ques­tions from share­hold­ers over its fi­nan­cial state­ments, bad debt and in­sur­ance poli­cies a week af­ter the fur­ni­ture re­tailer said it would chal­lenge its re­fer­ral to the Con­sumer Tri­bunal.

The an­nual meet­ing in Cape Town on Fri­day saw in­vestors, in­clud­ing Dave Wool­lam of credit lobby group Sum­mit Fi­nan­cial Part­ners, query pro­vi­sions made by Lewis for im­pair­ments and war­ranties. Share­hold­ers also clashed with chair­per­son David Nurek over at­tempts to stop them ask­ing ques­tions.

“There is a gross mis­rep­re­sen­ta­tion of the fi­nan­cial state­ments,” said Wool­lam at the meet­ing. “It’s my right to ask ques­tions,” he said, af­ter be­ing asked not to.

Lewis shares slumped 30% since the Na­tional Credit Reg­u­la­tor’s July 9 an­nounce­ment that it was re­fer­ring the re­tailer to the tri­bunal with the rec­om­men­da­tion that it be fined for mis­selling in­sur­ance.

The Public In­vest­ment Cor­po­ra­tion, the owner of a 15% stake in the com­pany, sub­se­quently asked for Lewis to in­ves­ti­gate its ac­count­ing prac­tices.

At the meet­ing, Nurek said Lewis’ im­pair­ment pro­vi­sions were ap­pro­pri­ate and its ra­tio of debt to eq­uity had im­proved in the past fi­nan­cial year.

“We have been run­ning this busi­ness in a con­ser­va­tive man­ner. Our im­pair­ment pro­vi­sion has stood the test of time. Where we make mis­takes, we fix those,” said CEO Jo­han Enslin.

The com­pany is op­pos­ing the re­fer­ral to the tri­bunal and last week filed an an­swer­ing af­fi­davit that raised chal­lenges to the pro­ce­dures adopted by the reg­u­la­tor.

Lewis said the re­trench­ment in­sur­ance sold to pen­sion­ers and the self-em­ployed had been given “through hu­man er­ror” and it would re­fund cus­tomers about R69 mil­lion.

In a state­ment on Fri­day, the com­pany said that af­ter mak­ing pro­vi­sion for the re­fund, rev­enue rose 7.7% in the four months through July. Debtor costs climbed 12.5% and the com­pany gen­er­ated al­most 70% of sales on credit.

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