Steinhoff International’s effort to recoup salaries from former executives appears to be heading for a lengthy legal battle as ex-chief financial officer Ben la Grange joined his former boss in filing an objection.
The struggling retailer is seeking a combined R1.1 billion from La Grange and ex-chief executive officer Markus Jooste for failing to prevent an accounting crisis that almost destroyed the company in late 2017. Jooste quit the day financial irregularities were first reported and La Grange was suspended eight months later.
Jooste said last week that Steinhoff’s claim for more than R850 million against him dating back to 2009 is “vague and embarrassing.” Now La Grange has filed his response to the claim, saying it lacks “sufficient allegations” to sustain action against him, according to documents filed to the High Court in Cape Town on Wednesday.
La Grange, who became group CFO in 2013, has given Steinhoff 15 days to withdraw the complaint and argues that if it’s determined the retailer’s claim doesn’t stand up, the company should pay the legal costs.
Steinhoff has highlighted a lengthy list of lawsuits as a significant threat to its ability to operate as a going concern. The claims against the company amount to at least 6.2 billion euros ($6.9 billion) and relate to the share-price collapse triggered by the accounting scandal, which demolished a number of peoples’ savings.
The company in April called for potential claimants to come forward and chief executive officer Louis du Preez last week said Steinhoff wants to settle all demands as quickly as possible.
According to separate court papers, Steinhoff is looking to consolidate several of the claims against it, including from former Chairman Christo Wiese, who is demanding about R59 billion.
© 2019 Bloomberg L.P.