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For every investor who held Steinhoff shares there are many who decided not to buy any. The reason was simple: it was not an attractive investment. The return on assets was poor, the corporate strategy of having such diverse businesses as furniture manufacturers and shoe retailers doesn’t reflect any obvious synergies, and buying an almost bankrupt bed retailer in the US at twice the market price didn’t make sense.
Those who invested in Steinhoff didn’t do their homework, but they now want to be compensated because they analysed fraudulent financials. They should have seen the many warning signs.
The proposed settlement reminds me of the global financial crisis, where the taxpayers had to bail out the big Wall Street banks because of their poor judgment of the housing market. Now asset managers want to be bailed out because of their poor judgment.
The Steinhoff settlement offer should be scrapped, and Steinhoff’s management should defend the cases in court. Just ask the claimants to prove they did proper due diligence.
Christian Vaatz Newlands, Cape Town
The FM welcomes concise letters from readers. They can be sent tofmmail@fm.co.za
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Steinhoff: scrap the settlement offer
For every investor who held Steinhoff shares there are many who decided not to buy any. The reason was simple: it was not an attractive investment. The return on assets was poor, the corporate strategy of having such diverse businesses as furniture manufacturers and shoe retailers doesn’t reflect any obvious synergies, and buying an almost bankrupt bed retailer in the US at twice the market price didn’t make sense.
Those who invested in Steinhoff didn’t do their homework, but they now want to be compensated because they analysed fraudulent financials. They should have seen the many warning signs.
The proposed settlement reminds me of the global financial crisis, where the taxpayers had to bail out the big Wall Street banks because of their poor judgment of the housing market. Now asset managers want to be bailed out because of their poor judgment.
The Steinhoff settlement offer should be scrapped, and Steinhoff’s management should defend the cases in court. Just ask the claimants to prove they did proper due diligence.
Christian Vaatz
Newlands, Cape Town
The FM welcomes concise letters from readers. They can be sent to fmmail@fm.co.za
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.