Steinhoff appoints Lehman Brothers insolvency veteran to board

Steinhoff International [JSE:SNH] moved to appoint insolvency expert Paul Copley to its supervisory board as the troubled global retailer seeks to strengthen management and add expertise following an accounting scandal.

A former partner at PwC, Copley worked as an administrator of Lehman Brothers, one of the highest-profile corporate collapses of the financial crisis of 2008. He’s currently chief executive officer of Reykjavik, Iceland-based Kaupthing EHF, the restructured successor of Icelandic Bank that was also bailed out in the credit crunch.

Steinhoff shares have plunged more than 95% since the owner of Conforama in France and Mattress Firm in the US reported a hole in its accounts in December, raising questions about its ability to survive as a going concern.

The retailer bought some time last month when it won support from a majority of creditors to restructure €9.4bn, but has plenty more to do to shore up its balance sheet.

Lawsuits loom

The South African company is also facing a string of class-action suits and other legal claims. Christo Wiese, formerly the company’s chairperson and biggest shareholder, has sued for R59bn. Parties related to Tekkie Town, a South African shoe retailer bought by Steinhoff in 2016, are seeking €120m, and businessman GT Ferreira is suing for €100m.

“If these legal claims have legitimacy, then Steinhoff is not solvent,” Graeme Korner, a money manager at Johannesburg-based Korner Perspective, said by phone Thursday. Adding skills in insolvency and business rescue will be helpful, he said.

• READ: Steinhoff says hole in accounts is deeper than first thought

Five new supervisory-board members were appointed at Steinhoff’s annual general meeting in April, including Peter Wakkie, who was heavily involved in Dutch retailer Royal Ahold’s restructuring and turnaround.

Copley has been nominated to join the supervisory board and will act as an adviser until he is put up for approval at Steinhoff’s next general meeting, the company said in a statement on Wednesday.

PwC is investigating Steinhoff’s finances and is expected to report back by the end of the year with a view to providing audited results.

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