Pepkor still barred from selling Tekkie Town after high court ruling
The former Steinhoff Retail Africa insists it does not want to sell the shoe retailer, but also does not want to be prevented from doing so should it want to
Retail group Pepkor, which is 71% owned by the embattled Steinhoff group, lost its bid to appeal against a court order that prevents it from selling off shoe retail chain Tekkie Town.
In 2016 Steinhoff bought control of Tekkie Town in exchange for Steinhoff shares. The shoe retail chain was then transferred to Steinhoff Africa Retail (Star was subsequently renamed Pepkor) ahead of its listing in September 2017.
The shares received for the shoe business became almost worthless when the Steinhoff share price plummeted in December 2017, following the disclosure of accounting irregularities.
In 2018, Tekkie Town’s former CEO Bernard Mostert and other co-founders launched a bid to reclaim ownership of the shoe retailer. They contend the 2016 transaction was based on financial accounts that were subsequently proved to be irregular. After leaving Steinhoff in 2018 they set up a new shoe retail chain called Mr Tekkie.
The latest court decision follows a ruling handed down in April by the Western Cape High Court barring Pepkor from selling the shoe retail chain. The order extends to Steinhoff, which is participating in the proceedings.
Although Pepkor has said it has no plans to sell Tekkie Town, it is expected to petition the Supreme Court of Appeal for leave to appeal against the order.
Mostert said on Monday they wanted to restore their interest and control of a business that was built “one store and one career at a time”.
“Unlike Pepkor management’s own case against Steinhoff, which is about money and damages, our quest is for purpose and a platform in which people can fully develop their talents,” said Mostert.
Former Steinhoff chair Christo Wiese, who was instrumental in building up Pepkor and exchanged his Pepkor shares for Steinhoff shares in 2015, has also launched action against Steinhoff. He is claiming R59bn in damages, which he says is the value of the Pepkor shares he sold to Steinhoff.