Steinhoff shareholders on the warpath at AGM
STEINHOFF International Holdings shareholders voiced their frustration with the scandal-hit retailer by voting against proposed changes to director pay policies and rejecting financial statements for last year.
Investors logged into the South African company’s virtual annual general meeting (AGM) held on Friday protested against the extent of fees paid to various advisers, some related to a deal the retailer reached with creditors to skip debt repayments following the group’s late-2017 accounting crisis.
The owner of the PEP clothing chain and Poundland in the UK was also questioned on whether it can finalise a proposed $1 billion (R16.6bn) settlement to resolve more than $8bn of legal claims lodged against the company. A lawyer representing the Public Investment Corporation, Africa’s largest money manager, added that an extensive probe conducted by auditors at PricewaterhouseCoopers into wrongdoing at the company should be made public.
Steinhoff shareholders have had a rough time since the retailer reported financial irregularities more than twoand-a-half years ago, with the stock still worth less than 2 percent of its value before the issues came to light.
The company has been able to survive by selling assets such as French furniture retailer Conforama and agreeing on new terms with lenders on about €9bn (R177.7bn) of debt, but the threat of punitive legal action continues to weigh.
“We are dealing with many, many interested parties who all have a peculiar set of circumstances dealing with their interaction with the company,” chief executive Louis du Preez said at the AGM. “I have to emphasise that the outcome remains uncertain.”
More than 95 percent of investors rejected a change to management pay policy, which was to align with directives in the Dutch Civil Code. Almost 52 percent voted down the 2019 financial statements.
Steinhoff said earlier on Friday that it’s banking on cash-strapped consumers looking for cheaper clothes to drive sales at its discount chains such as PEP.
As lockdowns ease, sales at its European Pepco and Poundland outlets and African PEP and Ackermans stores were expected to benefit as “customers need these essential products every day, and the value focus gives the business some inherent resilience in times of economic turbulence”, the company said.