Steinhoff’s investors to suspend legal battle as firm recovers

Agreement allows time to focus on completing tasks ‘in the interests of all stakeholders’.
Picture: Waldo Swiegers/Bloomberg

Steinhoff said on Wednesday investors who are suing the crisis-hit firm had agreed to suspend litigation until next year, allowing the retailer time to focus on its recovery.

The lawsuit brought in the Netherlands was aimed at compensating investors for the more than 14 billion euros ($16 billion) wiped off Steinhoff’s market value since the retailer uncovered accounting irregularities last year.

Steinhoff said the suspension of legal proceedings would be until April 3, 2019.

“This agreement allows us time to focus on completing these tasks in the interests of all stakeholders,” said Steinhoff’s acting CEO Danie van der Merwe in a statement.

Steinhoff has been working on a deal to restructure the debt of some subsidiaries with its creditors after revealing multi-billion euro holes in its balance sheet in December that wiped more than 90% off its market value and forced it to sell assets to fund working capital.

The lawsuit was brought by a collective group known as VEB/European Investors, Steinhoff said. It claimed that certain financial statements, prospectuses and press releases issued by the company were incorrect and misleading, the retailer said. 

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It is assumed that the “suspension agreement” was concluded to allow for PWC to issue their “findings” of their forensic investigation.

Let’s hope there is no “cleansing” prior to release.

It will be interesting to see if PWC themselves are sued in due course along with the rest, noting PWC’s “Steinhoff Outside-in Analysis” dated 20th September 2016.

The shareholders should seek a quick and not so demanding settlement with Steinhoff, it’s in the interest of no party to go though years and years of long court trials.

The shareholders should seek a quick and not so demanding settlement with Steinhoff, it’s in the interest of no party to go though years and years of long court trials.

For many shareholders it is not just about the obvious loss. It is far more about the constant plunder of companies in S.A. by management and directors. Shareholders interests should come first. They simply want to see justice done. Unless there are through criminal investigations (and not only of Jooste ) many shareholders will not back down.

End of comments.

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