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Steinhoff 'assessing' former chair Christo Wiese's R59bn lawsuit

Apr 26 2018 17:50
Jan Cronje

Cape Town - Steinhoff on Thursday evening reacted to news that Christo Wiese had instituted a R59bn claim against it by saying in a short note it would "assess the claims and determine the appropriate course of action".

Earlier on Thursday news that companies in Wiese’s Titan Group were suing Steinhoff for R59bn sent the global retailer's share price below R2.00 a share for the first time. Steinhoff shares were trading at R1.92 at 17:00 on the JSE, down 13.12% on the day. 

Wiese resigned as Steinhoff's chair in mid-December 2017, nine days after the group's CEO Markus Jooste stepped down amid an accounting scandal. The group's stock has fallen by over 95% in four months. 

In an update to shareholders on Thursday afternoon, Steinhoff confirmed that companies connected to Wiese had served summons on Steinhoff International Holdings (Pty) Ltd and Steinhoff International Holdings N.V.

"The Wiese entities are claiming in respect of cash investments made by the Titan Group in the company in 2015 and 2016. The total value of the claims amounts to about R59bn. The company will assess the claims and determine the appropriate course of action," it said. 

In an earlier statement the Titan Group also said the claims relate to investments made by Wiese’s Titan Group of Companies in Steinhoff in 2015 and 2016.

“Titan Group subscribed for shares in Steinhoff following the acquisition of Pepkor Limited from the shareholders of Pepkor. They now claim repayment of the subscription amount,” the statement read.

“The second claim relates to the Titan Group’s capital injection into Steinhoff in 2016 to enable it to meet its debt obligations at the time of its acquisition of Mattress Firm in the US.”

Steinhoff acquired Wiese's Pepkor Holdings for around R60bn in 2015. As Fin24 previously reported, it was paid for via the “issue of 839 million new Steinhoff shares at R57 per share and R15bn cash,” according to a November 2014 presentation. 

Wiese told CNBC Africa in an interview on Thursday afternoon that he watched Steinhoff for two years before making the investment. According to Wiese, he evaluated the management systems and "everything appeared to be in order".

Wiese said he would love to have Pepkor back, but it is part of Steinhoff Africa Retail (STAR), and Steinhoff is the main shareholder of STAR.

"The action does not affect STAR at all. The action is against the shareholder in STAR, which is Steinhoff," said Wiese.

He added that he could not "postulate" whether Steinhoff would fight back, as Steinhoff would have to make its own decision on how to handle the matter.

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christo wiese  |  steinhhoff
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