Dutch investors tackle Steinhoff
LEGAL FIGHT LOOMS: GO-AHEAD TO SUE FOR BILLIONS
Steinhoff has deadline to reply to shareholders’ allegations of November 7.
Ashareholder group has got a green light to sue Steinhoff International in the Netherlands, kicking off a legal fight to recover some of the billions of dollars investors lost after the retailer’s accounting scandal.
In a procedural hearing last month, Netherlands-incorporated Steinhoff had argued against going ahead with the court case filed in Amsterdam by Dutch investor group VEB, saying a legal claim was first filed in Germany. The company moved its primary listing to Frankfurt from Johannesburg in 2015.
The court rejected Steinhoff’s argument on Wednesday, saying it “ignores the rule that the jurisdiction of a court is in principle governed by the residence of the defendant”.
Steinhoff must reply to the allegations by November 7.
“A Dutch NV must simply be able to be sued in the Netherlands,” said Geert Koster, a lawyer for VEB, which says it represents some 3% of the retailer’s shareholders. Steinhoff has said only 0.25% of its shareholders are based in the Netherlands, downplaying the need for a Dutch judge to rule on the case.
Steinhoff is studying the Dutch court’s decision, including whether it provides grounds for appeal, according to a statement this week. It added that the Amsterdam court has granted its request to summons former CEO Markus Jooste, in proceedings to weigh his personal liability, within three months.
Since the accounting scandal erupted December 5, Steinhoff has written off the value of its assets by at least €12.4 billion and said restatements of its financials may have to go back to at least 2015. The stock has plunged 94%.
German suit
In Germany, law firm TILP filed a claim against Steinhoff on behalf of an investor and is working to expand it into the German version of a class-action suit. Steinhoff has also sought to have German courts declared unauthorised to rule on the case, said Daniella Strik, a lawyer for Steinhoff, during the Dutch court session.
A German ruling would have no legal authority for shareholders who hadn’t opted in to the German collective action, VEB’s Koster said.
Shareholders haven’t had any lost money returned yet. VEB argues that Steinhoff issued inaccurate and misleading information in at least two annual reports and various news releases, and didn’t immediately disclose the information’s inaccuracy.
The Dutch shareholder group, which represents retail and institutional investors, also has a separate claim outstanding against the Dutch office of Deloitte for the damage suffered by the Steinhoff shareholders. VEB said Deloitte failed in its statutory task as auditor when approving the company’s annual report in 2016.
Steinhoff has appointed PwC to probe its finances, with the final results expected to be published by the end of the year. – Bloomberg
Court grants permission to summons ex-CEO.