Markus Jooste. Picture: SUNDAY TIMES
Markus Jooste. Picture: SUNDAY TIMES

Absa has brought an urgent application in the High Court in Cape Town for an order to provisionally liquidate Mayfair Speculators, of which former Steinhoff CEO Markus Jooste was a director before his recent resignation.

The application for unpaid debt of R226.3m plus interest will be heard on Friday. The other director of the Stellenbosch-based company is Stefanus Potgieter, the son-in-law of Jooste.

Absa manager for business support Hester van Niekerk said in her founding affidavit in support of the application that Mayfair Speculators was unable to pay its debt of R226.3m to the bank. Absa had been informed that the company had liabilities of about R1bn and assets, if realised, of about R350m.

Van Niekerk said Mayfair Speculators was “both technically and commercially insolvent due to the material deterioration in the its primary assets, namely the Steinhoff shares held by it”.

She noted that in August, Mayfair Speculators had declared a dividend in specie to its sole shareholder, Mayfair Holdings, to the value of about R1.5bn. This was when Jooste was still a director. The dividend consisted of houses, development properties, Lodestone Brands and a company that manufactured pipes.

Van Niekerk also noted that Mayfair Speculators and/or Mayfair France was in the process of selling racehorses. Mayfair Holdings holds 85% of the shares of To The Top and 100% of the shares in Mayfair Speculators of France.

Absa wants the lawfulness of this dividend in specie and the disposal of other assets to be investigated. Van Niekerk surmised that the dividend was declared because Jooste knew that the financial irregularities in Steinhoff would be uncovered soon.

“The respondent’s primary assets are the share portfolio held by SBG Securities in Steinhoff International Holdings, certain racehorses and a 49% share in Klawervlei Stud, a property-owning entity,” Van Niekerk said.

She related how Absa had provided Mayfair Speculators with a R335.6m overdraft facility and bank guarantees of R14.4m in December 2016.

She said the collapse of the Steinhoff share price from R46.25 to R10 in the period December 5-7 meant that Mayfair had breached the share cover covenants in its agreement with Absa because the amount outstanding under the overdraft facility exceeded 70% of the value of the shares held as security. The shares held by SBG in Steinhoff were ceded as security for the bank facility.

When Absa asked the company to provide additional collateral to remedy these breaches, Absa was informed that none was available.

Van Niekerk said the sale of the Steinhoff shares held as security was “highly unlikely” to extinguish Mayfair Speculators’ indebtedness to Absa.