What the Dutch court ruling means for Steinhoff
The retailer has been ordered to amend its 2016 accounts in a ruling viewed as a victory for one-time business partner Andreas Seifert
As recently as November 20 2017, the Steinhoff board said it remained confident that a Dutch court would dismiss the action brought by a former joint-venture partner, but on Tuesday the court ordered Steinhoff to amend its 2016 accounts in what has been described as a victory for one-time business partner Andreas Seifert.
The ruling by the Dutch court may also have implications for Steinhoff’s accounting treatment of Conforama in which Seifert, who owns German furniture chain XXXLutz, claims to have a 26.5% stake.
The Dutch court ruling will force Steinhoff to restate its 2016 accounts from a 100% controlled interest in Poco to a 50% controlling interest. It must also record that Seifert holds a 50% non-controlling interest. The Dutch court also requires Steinhoff to revise the payable liability included in its 2016 accounts to cover payment to Seifert for the disputed 50% stake.
One analyst, who did not want to be named, said the sums involved were unlikely to be substantial, but the news added to investors’ concern about the integrity of Steinhoff’s accounts.
The share price was down 3.49% to close at R5.25 on Tuesday, in reasonably heavy volume trade.
The dispute with Seifert dates back to September 2016 when Steinhoff acquired Poco.
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