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Steinhoff in talks with insurers to help settle claims

Instituted against the retail group by claimants who lost money when it revealed holes in its accounts in December 2017.
Image: Dwayne Senior/Bloomberg

South Africa’s Steinhoff International Holdings NV is in talks with insurers to help settle lawsuits instituted against the retail group by claimants who lost money when it revealed holes in its accounts in December 2017, the firm’s CFO said on Monday.

Litigation remains a significant outstanding challenge for the retailer, which has proposed a $1 billion global lawsuit settlement plan to settle about 90 separate legal claims in the Netherlands, Germany and South Africa.

The combined claims of those who have quantified their alleged damages are in excess of R136 billion ($9.12 billion), Steinhoff has said.

A court must now set a date for convening a creditors’ meeting in which the litigants must vote on the proposal, which the company has indicated would be supported by claimants. Steinhoff has “received positive indication from a lot of litigants that they will support” the proposal, Group Financial Officer Theodore de Klerk told Reuters in an interview.

There are still one or two groups of litigants from whom the retailer is seeking to obtain support, including Dublin-based Hamilton, which is managing a class action on behalf of major South African institutional investors, de Klerk said.

“We’re also in discussions with our insurers to see if whether like Deloitte they can’t also make a contribution that we can then pass on to these claimants,” he added.

Steinhoff’s former auditor, Deloitte, agreed last month to pay up to 70.34 million euros ($84.81 million) to certain claimants as part of the proposed settlement plan.

The retailer, whose budget furniture, clothes and homeware businesses span four continents, is also focused on lowering its nearly 10 billion-euro ($12.06 billion) debt by disposing of non-core assets and parts of its core businesses like a potential listing of Pepco Group in Europe.

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COMMENT HELD FOR MODERATION
2 MARCH 2021 @ 3:42 PM
Holes in accounts is such a gentle way of putting it. Claims for damages are 9 fold the offer to settle. That puts it into the familiar 10 cents on the dollar category. Major controller shareholder is innocent? but appears to feign innocence. The choice appears to be stupidity or caught-in-the-act. The combined whiners appear to chase their collective tails interminably. The more this absurdly complex conglomerate appears to recover the more it appears to sink itself.
The only question is – are the appearance deceptive or not?
Comment on story: Steinhoff in talks with insurers to help settle claims

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