Registered users can save articles to their personal articles list. Login here or sign up here

Steinhoff seeks R850m from ex-CEO after accounting crisis

Meanwhile, ex-CFO Ben la Grange is being sued for about R271m as part of the same case.

Steinhoff International is seeking more than R850 million ($59 million) from former chief executive officer Markus Jooste for his role in the accounting crisis that triggered the retailer’s near-collapse.

The owner of Conforama in France and Mattress Firm in the US is looking to claw back base salaries, bonuses and other incentives paid to Jooste over several years from 2009, according to legal papers filed to the High Court in Cape Town. Ex-chief financial officer Ben la Grange is being sued for about R271 million as part of the same case.

The lawsuit leaves little doubt that Steinhoff’s current management holds Jooste chiefly responsible for the series of dubious third-party transactions and artificially inflated asset values at the South African company. The ex-CEO and La Grange were among eight people named by Steinhoff in March as being allegedly behind the irregular deals, which ultimately forced it to restate years of financials.

Read: Steinhoff: Proliferation of legal actions pose threat

The shares have collapsed by 97% since the crisis erupted in late 2017, while Steinhoff remains locked in talks with creditors about the restructuring of $12 billion of debt. The company is being investigated by regulators and authorities around the world, including South Africa’s anti-graft police unit known as the Hawks.

Mistaken belief

The payment of salaries and bonuses to Jooste and La Grange was dependent on “the sound and successful financial performance” of the retailer, according to the court papers. Had the company been aware of all the facts, the remuneration committee would not have recommended any payment, they said. Steinhoff was under the “reasonable, but mistaken, belief that such base salaries were due,” the documents said.

Jooste didn’t answer a call or text message to a mobile-phone number he has used in the past. His lawyer, Callie Albertyn, didn’t immediately respond to an emailed request for comment.

“I have received the summons and we are currently working through it,” La Grange said by text message. “I don’t wish to comment on the claim other than by way of the legal process.”

Steinhoff didn’t immediately respond to a request for comment.

As part of the more than R850 million claim against Jooste, Steinhoff is seeking about 2.1 million euros ($2.4 million) in bonuses that the ex-CEO received in 2017 without prior approvals. Those payments were first disclosed in Steinhoff’s annual report for that year, which was belatedly released in May.

Read: Dutch court to take on shareholders’ case against Steinhoff

Jooste has 10 days to respond to the legal claim, while La Grange has one month. The case was first reported by the Johannesburg-based Financial Mail.

© 2019 Bloomberg L.P.
Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   16

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

Oh really, only R85 million?

”Change” – R 850 million!

Government should be attaching assets here and foreign as suspected proceeds of crime through preservation order. Then wait for the owners to object and face questions, not least from SARS about ownership and source of wealth versus tax returns.

Al Capone was eventually taken down by IRS not Police

Is it not maybe a goo time to lock them up and throw the keys away. The reason that has not happened yet can only have something to do with money? Like bribery or something.

it is more effective to take them to the cleaners than jail. Take verything, the yatchs, the private jets, the apartments, holiday homes, homes, horses, wives, kids, mistresses everything.

This will be a test for the efficiency of tax-havens. Jooste may not have any assets in his name. Most of his assets may be housed in offshore trust structures. Many of these structures advertise their services as being impenetrable by tax authorities and prosecution authorities. It seems as if this was part of his long term plan. He knew all along that “day zero” will eventually arrive, so he hid the stash in the BVI. This will be a test for the OECD and anti-money-laundering regulations. Maybe Jooste will not only be blamed for the demise of Steinhoff, but also for the relentless attack on offshore structures.

We are going to be seriously disappointed if any of these criminals appear in court one day.

No one in the Hawks and NPA have even thought of doing their job in the last ten or more years.

They know that their incompetence and lack of skill will be on full display.

So, they are too embarrassed and ashamed to catch criminals.

Let me burst everyone’s bubble with one word – Tigon. 12 years later, as guilty as sin and still rattling around the courts. This tonsil, la Grange and all the other kleptomaniacs from Steinhoff will never see the inside of a jail cell and will die very, very wealthy. Only Louis du Preez and Werksmans / Linklaters are going to win here

So true,and remember old Mr King? he danced around SARS for many years.

But he paid in the end!

What about the 325 million euros Weise got paid in Europe for “upfront” payment re Shoprite equity ?

Where is SARS in this matter ?

Well it’s a start at least. reminds me of Alan Hiscock of Macmed notoriety being saddled with about R600 million way back in the early 2000s. I doubt he ever paid it back, though.

Don’t send Marcus to jail. Force him to watch the parliamentary channel for a couple of years.

Load All 16 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

SHOP NEWSLETTERS TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2