Steinhoff gets reprieve as Johannesburg class action is dismissed
Lawsuits replaced debt as Steinhoff’s most pressing concern after the retailer struck a deal with creditors to delay payments to 2021
Steinhoff International got some respite on Friday as a Johannesburg high court dismissed a local class action suit brought against the global retailer after an accounting crisis in late 2017 caused its share price to collapse.
The application, by a retired pensioner who had bought shares for R80,000 between 2013 and 2016, is one of various mass action suits planned against the company. In 2018, several SA businesses, representing clients that held about 20% of Steinhoff’s stock before the uncovering of the accounting irregularities, joined a class action by Dutch law firm BarentsKrans NV.
“I am aware that this conclusion will disappoint the expectations of Steinhoff shareholders that the law must be able to compensate them for their losses,” judge David Unterhalter said. “This does not mean that the shareholders are without remedy. It is for the Steinhoff companies to hold the Steinhoff directors and Deloitte liable for any breach of duty.”
Lawsuits replaced debt as Steinhoff’s most pressing concern after the retailer struck a deal with creditors to skip principal and interest payments on about €9bn (about R175bn) of debt until 2021. Last month, a plan by Steinhoff to reduce legal costs by combining some of its biggest individual claimants into one case was rejected.
Steinhoff is “studying” Friday’s judgement and will “comment in due course,” it said in an emailed response to questions. The company plans to release 2019 annual earnings on June 30.