Shareholders clash with Lewis board
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.