Steinhoff faces billions in legal claims — report

Steinhoff International, battling the fallout from a massive accounting fraud, faces legal claims amounting to more than €9bn (R174bn), the South African retailer’s annual report showed yesterday.

The report for the year ended September listed numerous court cases with claimants seeking billions in payments or damages.

It also included Steinhoff’s annual results, with the retailer’s full-year loss widening to €1.8bn (R34.8bn) from a €1.2bn (R23.2bn) loss a year earlier.

Steinhoff’s problems began in December 2017 when the company revealed holes in its accounts, shocking investors in the international retail group, which were the initial signs of an accounting fraud since estimated to total $7bn (R121bn).

Established more than 50 years ago, the company expanded beyond SA to become a furniture and household goods retailer straddling four continents before the accounting scandal came to light.

After a debt restructuring last year, the company said that managing its litigation risks — the second phase of its plan to return to normality — was now its focus, with these presenting a “significant challenge”.

The retailer’s Johannesburg listed stock fell 4.9% o yesterday. It is also listed in Frankfurt.

Steinhoff’s annual report said the company was assessing the merits of and responses to the claims and no provisions had yet been taken as it was uncertain when, or if, it would have to pay.

Steinhoff said last year it could issue shares to help to cover legal payouts related to the accounting fraud.

The company has also been selling off assets as part of plans to transform itself into a retail holding company.

But the annual report said Steinhoff now also has to contend with the impact of the coronavirus outbreak, which hurt its performance this year.