Sygnia backs Deminor Recovery Services suit against Steinhoff
Sygnia plans to join the class action to be instituted by Deminor Recovery Services against Steinhoff, after it lost R316m on the stock’s collapse.
Sygnia is the third South African-based asset manager to announce legal action against Steinhoff. The Public Investment Corporation and Coronation, which lost about R17bn and R14bn, respectively, on the retailer’s collapse will also pursue lawsuits against the group.
Investors in Steinhoff lost about 98% of their investments in a share plunge when CEO Markus Jooste admitted to having made some "mistakes", which Steinhoff later confirmed as "accounting irregularities". Jooste resigned in early December, leaving the board to conduct a forensic investigation to determine the nature of the widespread accounting fraud.
Brussels-based Deminor says on its website that it "assists private individuals, corporations and institutional investors from across the globe with recovering economic losses caused by various types of misconduct".
Deminor’s lawsuit is not mentioned in the "litigation and claims update" contained in Steinhoff’s most recent presentation to lenders. Class actions that are mentioned include those being brought by the Dutch Investors’ Association (VEB) and German law firm TILP. VEB has told Business Day that "a significant group of South African parties have already joined our class action and we are in talks with many more".
A representative of TILP told CNBC Africa in April that about 800 investors, including retail and institutional investors from SA and abroad, had joined its class action. It had calculated R7.3bn in claims at the time.
Sygnia, which for the most part manages passive rather than active funds, had "radically" changed its engagement with company management, CEO Magda Wierzycka told Business Day on Friday. There would be "no more sitting on the fence". "We are actually going to take an active interest in the companies listed on the indices we track."
Sygnia would launch an activist hedge fund in June.
The fund would identify opportunities to effect change at companies that had "weak governance, weak management and weak strategy".
Sygnia also planned to launch SygniaCoin, a cryptocurrency exchange, in the third quarter of 2018. The exchange would list products that harnessed blockchain technology, Wierzycka said. It would also give Sygnia the opportunity to be involved in the regulation of cryptocurrency in SA, she said.
Sygnia had clashed with the JSE over attempts to list a bitcoin exchange-traded fund (ETF). While it was not abandoning these plans, it would launch a "multi-crypto" fund on SygniaCoin.
Anthony Clark, an analyst at Vunani Securities, said on Friday: "The cryptocurrency ETF may not generate huge profit but will generate good asset flows, media coverage for innovation and will continue to align Sygnia as a visionary in asset management."