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Steinhoff faces German mass investor action as court opens case

May 23 2019 11:43
Karin Matussek, Bloomberg and Fin24

Steinhoff International Holdings, already embroiled in multiple legal claims over its accounting, is now also facing a mass investor lawsuit in Germany after a Frankfurt court received ten suits, the minimum amount to allow the cases be heard jointly under a special group litigation procedure.

The Frankfurt Regional Court’s ruling, dated May 22, was published Thursday in an online register. The suits will now be sent to an appeals court, which will appoint a lead plaintiff in the case. The investors are seeking compensation for losses they say were caused by Steinhoff’s accounting scandal.

Shares in the embattled Stellenbosch-headquartered retailer were down 7% at R1.32 a share at 11:15 on Thursday on the JSE. Steinhoff shares have lost over 90% of their value since its former CEO Markus Jooste abruptly resigned in December 2017,  cutting its market capitalisation by about R200bn.

The company was set to appear in court in a different matter on Thursday, after a group of shareholders petitioned the Enterprise Chamber of the Amsterdam Court of Appeal for a hearing around the decline in its share price. The furniture and retail conglomerate is domiciled in the Netherlands. 

In a statement on Wednesday, however Steinhoff said it and the shareholders had "mutually agreed to postpone the date of this hearing to a date later in the calendar year".

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