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Steinhoff’s effort to recoup executives’ salaries faces lengthy legal battle

Retailer seeking a combined R1.1bn from Ben la Grange and Markus Jooste.

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.

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As a young CFO he was earning a basic salary of R50M pa, there are far more smarter and dedicated people that contribute to society that earn a whole lot less than he was.

Besides the legal things, I wonder if he feels that he added value and deserved this type of remuneration. They way they are behaving suggests that they feel hard done by.

But I think we all know the real reason that he was earning such a ridiculous salary at such a young age even relative to others in such similar positions.

Agreed he chosen at a very young age to be the CFO so he wouldn’t stand up to the big Mr Jooste and ask the difficult questions he should have asked. And obviously he was paid to look the other way. If ever he thought his appointment was purely on merit, the reality now is showing otherwise. How on earth else do you explain a USD 7 billion hole in the financials?

So, the executives and the chairman of the board member of the same company they ran feel that the company is somehow in the wrong.

Both of them contravened the Companies’ Act of 2008 as executive directors, as well as the ethical codes of the occupation. They should sit for a very long time and payback the money

The market capitalization before Steinhoff announced that the previous statements cannot be depend upon was more than 250 billion rand, while now it less than 5 billion, so Steinhoff is should pay back the defrauded share holders 245 billion rands, that’s more than 14 billion Euros plus cost and interest, which’s way more than the “6.2 billion euros” quoted in this article, however it’s possible that not all the defrauded share holders joined the court cases yet.

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