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StanChart and Commerzbank targeted in suit over Steinhoff

Investors are suing Steinhoff to recover billions of dollars they claim they lost after the firm’s implosion.

Standard Chartered and Commerzbank are among companies targeted by investors suing Steinhoff International to recover as much as 12 billion euros ($13.8 billion) they claim they lost because of accounting irregularities at the retail giant.

The suit was filed in Johannesburg and seeks class-action status to cover shareholders who bought Steinhoff stock from June 26 2013 to December 5 2017, South African lawfirm LHL Attorneys said in an emailed statement.

Other businesses with links to Steinhoff including Absa Bank, auditors Deloitte and Roedl & Partner were also named as co-defendants as the shareholders seek to recoup their money. Individuals targeted include former Steinhoff Chief Executive Officer Markus Jooste, ex-Chairman Christo Wiese and former Chief Financial Officer Ben la Grange.

Furniture retailer Steinhoff plunged more than 90% in December after it said it couldn’t release its financial results and was trying to figure out if there was a 6 billion-euro hole in the balance sheet. The company in July won support from creditors to restructure 9.4 billion euros of debt. Auditors at PricewaterhouseCoopers are investigating the accounts and aim to publish a report by the end of the year.

A spokesman for Steinhoff said the company hasn’t received any court papers in the matter. A Commerzbank spokesman said the lender doesn’t comment on current or potential client relationships.

Standard Chartered, Wiese and lawyers for Jooste and la Grange didn’t reply to emails seeking comment. Absa bank didn’t immediately respond to a request for comment.

Roedl & Partner declined to comment citing confidentiality rules. A Deloitte spokeswoman said the auditor hasn’t received any information on this beyond press reports and thus declined to comment.

The suit is backed by Stichting Steinhoff International Compensation Claims, a foundation under Dutch law to organise investors who seek compensation.

© 2018 Bloomberg

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And so the saga gets even worse and the plot thickens. Wiese claims billions in losses from Steinhoff NV and shareholder investors again claims billions from Wiese and company as well as from Steinhoff. The already bankrupt Steinhoff International NV won’t survive the very high current debt and the years of legal battles and legal fees. It has become time that this share finally be suspended and that Steinhoff take the unavoidable ultimate resolution to place the businesses in business rescue.

The time for suspension or any rationale for it has long gone.

Suspending from december-june? Sure makes sense.

After restructuring agreement? Madness.

France: in April, May, June you used to preach doom and gloom about Steinhoff, while in the back ground you were stocking up, and sold at a more than 100% profit, so how do we know that you not doing the same again?
It’s a well known fact that courts won’t just order money to whoever and whatever claimants claim, many things and disputes will have to be debated and studied by the court in full details before any conclusion can be established, and the results are unknown, and the guilty parties can be Deloitte or many parties other than Steinoff (that can actually be considered to be a victim of misconduct of auditors, fiduciaries, where their insurance might eventually be sued to pay a compensation).

John@33 – You are both spot-on and dead wrong.
Yes, I have made a very handsome profit from several trades in the volatility of this share over the past eight months since 7 Dec 2017. Volatility equals high risk opportunity. High risk equals high profits or huge losses.

But my critique of Steinhoff has been very constant and the same since day one. I have never been bullish about a rosy outcome for Steinhoff and am still convinced that the Steinhoff dilemma will not end well. The facts speak for itself.

The temporary debt standstill arrangement only buys them time to sell assets at hopefully a better value than would be the case at a fire sale instance. Their cash-flow is still negative and declining. There is no potential of their cash-flow increasing to be able to service debt repayment in the future. Negative cash-flow with such very high debt inevitably leads to foreclosure. Only time will tell who have interpreted the clear signs correctly or incorrectly.

Best of luck with your conviction that the Steinhoff mess are only a little bump in the road.

If the story is true, agree 100% but unlikely to happen as execs at Steinhoff will do their best to “drag a dead horse down the road” for as long as possible so they get paid salaries.

The Board has no regard for shareholders.

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