Steinhoff expects advisory fees to fall in 2020
Embattled retail group Steinhoff International said on Wednesday that it is making every effort to reduce advisory fees in its 2020 financial year, as it continues to battle the fallout from its accounting scandal.
The group spent €158m (R3bn) in its year to end-September on fees, including for restructuring, legal issues and liquidity management, but said it had made progress in restructuring the group after it uncovered a €6.5bn hole in its accounts in 2017.
This caused a share collapse and multiple lawsuits from former business partners and aggrieved shareholders, including former chair Christo Wiese.
The group said on Wednesday that advisory fees are expected to fall in 2020, but legal advisory fees are expected to remain high in the period ahead as it attempts “to resolve and deal with outstanding litigation and seek redress against former executives and related parties”.
According to its annual report, legal fees remain the most significant advisory costs, while its had also spent €16m related to a forensic investigation into the group.
PwC delivered its forensic report to the Steinhoff’s lawyers, Werksmans, in mid-March 2019. Steinhoff said in June that SA authorities had asked PwC to assist in criminal investigations into accounting irregularities at the retailer, adding that it had agreed to fund part of this work.
Steinhoff said on Wednesday that it continues to focus heavily on litigation, which is a major issue facing the company, and is working to resolve outstanding claims against the group and claims it may have against third parties.
In morning trade on Wednesday, Steinhoff’s share had fallen 2.94% to 99c, having lost almost 99% of its value over the past three years.