Mr Jooste, you’ve been served

Sunday Times - - Business Times - By TJ STRY­DOM

● Dis­graced for­mer CEO Markus Jooste is one of sev­eral Stein­hoff In­ter­na­tional di­rec­tors who have been served with pa­pers as part of a multi­bil­lion-rand law­suit against the bat­tered re­tail group.

“This means they are of­fi­cially aware of the pro­ceed­ings against them,” said Zain Lun­dell, part­ner at LHL At­tor­neys, the South African firm in­volved.

Jooste, for­mer CFO Ben la Grange, for­mer chair Christo Wiese, his son Ja­cob and cur­rent chair Heather Sonn have all been served, Lun­dell said.

Share­hold­ers had to stom­ach heavy losses as Stein­hoff stock shed 90% of its value in the days af­ter Jooste’s de­par­ture in De­cem­ber 2017 when the re­lease of fi­nan­cial state­ments was put on hold due to “ac­count­ing ir­reg­u­lar­i­ties”. The stock has not re­cov­ered.

Law firms have pulled to­gether some of the in­vestors to claim nearly R200bn from Stein­hoff, its sub­sidiaries, di­rec­tors and au­di­tors Deloitte SA for al­legedly mis­in­form­ing share­hold­ers be­tween June 2013 and De­cem­ber 2017.

But the bounty in Stein­hoff, judg­ing by fil­ings in the past year in­volv­ing pre­vi­ously undis­closed debts and in­flated as­set val­ues, is worth much less than the amount claimed by share­hold­ers.

But even if Stein­hoff does not have the money, the di­rec­tors — or the in­sur­ance com­pa­nies that sold them li­a­bil­ity in­sur­ance — might. And other en­ti­ties such as Deloitte or PSG Cap­i­tal or Com­merzbank, among those listed as de­fen­dant com­pa­nies by the law firms, could have deeper pock­ets than Stein­hoff.

Al­lan Gray, In­vestec As­set Man­age­ment and Old Mu­tual are among the in­vestors sup­port­ing the process be­ing driven by law firms Bar­entsKrans in the Nether­lands, TILP in Ger­many and LHL in SA.

The rest of the in­di­vid­u­als and in­sti­tu­tions on the list are ex­pected to be served in the next few weeks, said Lun­dell.

There­after, the case can be cer­ti­fied by the high court as a class ac­tion, which could hap­pen by April or May, he said. Cer­ti­fi­ca­tion will also map out a time­line for the rest of the process, ex­pected to drag on for years.

In the mean­time, Stein­hoff, which con­trols SA’s Pep­kor, US-based Mat­tress Firm and the UK’s Pound­land, among other re­tail in­ter­ests, is in­tent on re­as­sur­ing cred­i­tors it can con­tinue op­er­at­ing.

Wiese, who con­trolled the con­glom­er­ate from 2015 un­til De­cem­ber 2017, is also claim­ing R59bn from Stein­hoff. In the class ac­tion suits, how­ever, he is not a claimant but a re­spon­dent.

Asked if he has been served, Wiese said: “Ja, they have served all the di­rec­tors as far as I know. There’s this class ac­tion or what­ever, noth­ing new has de­vel­oped there ei­ther.”

In Oc­to­ber, the Dutch In­vestors’ As­so­ci­a­tion (VEB) agreed to put its class ac­tion pro­ceed­ings against Stein­hoff on hold un­til April this year to al­low the com­pany time to re­struc­ture its fi­nan­cial li­a­bil­i­ties and fi­nalise in­ves­ti­ga­tions and fi­nan­cial state­ments.

VEB sued Stein­hoff in the Nether­lands for fi­nan­cial state­ments, prospec­tuses and press re­leases, which, ac­cord­ing to VEB, had been mis­lead­ing. — Ad­di­tional re­port­ing by Pene­lope Mashego

The bounty in Stein­hoff is worth much less than the amount claimed

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