The former owners of Tekkie Town can proceed with their liquidation application against Steinhoff International, after the Western Cape High Court dismissed the intervention application of two parties, and confirmed that the local courts have jurisdiction to hear the case.
The court dismissed the applications of SIHNV Financial Creditors (a group representing Steinhoff creditors) and Frederic Verhoeven and Christiaan Robert Zijderveld (two Dutch administrators who were administering settlement proceedings on behalf of Steinhoff in the Netherlands) to intervene and oppose the liquidation application.
The court also ruled that the South African courts have the jurisdiction to hear the liquidation application.
The judgment, therefore, paves the way for the Tekkie Town owners to continue with the liquidation application, which is set to resume on Thursday.
The former Tekkie Town owners, including Braam van Huyssteen and Bernard Mostert, sold their interest in the business to Steinhoff in 2016 for R3.2 billion in Steinhoff shares.
However, these shares became virtually worthless when Steinhoff’s share price imploded in December 2017, after severe accounting irregularities emerged.
The former Tekkie Town shareholders did not institute a claim against Steinhoff as other investors did, but instead initiated legal proceedings for their former business to be returned to them.
However, earlier this year, they filed for Steinhoff’s liquidation.
Mostert said in response that the “attack on our bid to liquidate Steinhoff could have been derailed by the attempted intervention of the hedge funds that bought Steinhoff debt after the revelation of the fraud and also by the technical argument around whether South African law provides for the winding up of an external company.
“There was also an attempted intervention from the Dutch administrators who participate in Steinhoff’s self-architected settlement proposal. We are grateful that the ruling on all three of these issues went in our favour and now we can continue with our bid to have Steinhoff liquidated and bring the fraud and who are the beneficiaries of the fraud into the open.”
In response, Steinhoff’s shares tanked as much as 40% on Monday, before recovering to trade down only around 10%.