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Cape Town – Steinhoff Africa Retail (STAR) chairperson Jayendra Naidoo released a statement on Monday evening in which he sought to clarify matters involving the founder of its subsidiary Trekkie Town Braam van Huyssteen.
Van Huyssteen resigned as chairman of the STAR [JSE:SRR] property division in May, saying that individuals at a broader level were making it impossible for him to pursue the kind of outcomes that he had hoped for in his company.
Earlier on Monday STAR confirmed in a shareholder announcement that it received notice of a claim lodged by the founders and original shareholders of Tekkie Town around an earn out agreement.
Also on Monday, the company was said to have been unsuccessful in a bid to secure Johann Rupert as a potential investor.
Naidoo said the so-called “earn out” mentioned in the media was not a matter on which STAR entered into any contract whatsoever. STAR was willing to defend any claims which are made in respect of Tekkie Town, the statement read.
“While we have empathy with him and all other people in the same position, STAR’s legal advisers believe his claims, if any, is only a matter for Steinhoff and STAR is not legally subject to any claims as a result of the Steinhoff acquisition of Tekkie Town, which occurred prior to the establishment of STAR, and the acquisition by STAR of certain assets from Steinhoff,” Naidoo said.
Naidoo said the only contractual relationship between STAR and Van Huyssteen was an employment contract. The statement said this employment contract had since been terminated by Huyssteen.
Naidoo also denied that STAR was entering into any negotiations with Remgro or any other company regarding the future of the business.
“STAR management have, in the normal course of their functions, been in numerous investor presentations with several investors and potential investors, amongst others Remgro,” said Naidoo.
He said STAR made a provision of R500m in its recent interim results. This was done as a result of a potential legal obligation arising from a longstanding guarantee which was issued by Pepkor entities which are subsidiaries of STAR, Naidoo said.
In his statement Naidoo said, given that the entity’s liabilities were higher than the value of the underlying Steinhoff shares held by BVI, the board of STAR would take a prudent decision to provide for this amount in its interim accounts.
“STAR has at this time not written off any loans to members of management, nor has it paid any monies to any bank in lieu of the guarantee, as yet. BVI has indicated to STAR its intention to repay this liability pending recoverability from Steinhoff,” the statement read.
He said STAR had appointed a special Board sub committee to oversee an independent legal review of all the relevant documentation. This would be done with a view to explore how to mitigate STAR’s legal risks.
“Bowmans has been appointed as independent legal advisors and has commenced its work. The board understands that the management investment vehicle was in existence prior to Steinhoff’s acquisition of Pepkor, and the guarantee and loans provided by Pepkor was undertaken in line with common business practice at the time of a major transaction with a private equity fund in 2011,” he added.
The statement said once the board sub-committee and its legal advisors completed their work, it will report to the board which will consider how best to proceed. He said this work would be concluded “within a relatively short space of time”.
