Share

Steinhoff owes us R4.6bn, says firm linked to former partner

accreditation
Steinhoff
Steinhoff

South African retailer Steinhoff International said on Tuesday a former partner firm of its European operations claims it is owed about R4.6 billion by the company.

Steinhoff is in the middle of a clean-up of its balance sheet after discovering multi-billion euro holes in its balance sheet more than a year ago.

The company, which is engulfed in one of South Africa’s biggest corporate scandals, is being audited by PwC.

The investigation is being carried out a year after the owner of brands including France’s Conforama and Britain’s Poundland admitted to “accounting irregularities”, sending its shares plunging and leaving it fighting for survival.

In an appearance before Parliament in September, the company’s former chief executive Markus Jooste blamed the 2017 plummet of Steinhoff shares on the company’s Austrian strategic partner and auditing firm Deloitte.

When Jooste described the circumstances that led to his resignation to Parliament, he placed most of the blame on Austrian businessman Andreas Seifert, who owned Poco – a company with which Steinhoff went into partnership in 2007.

He described Seifert as a major catalyst that led to Steinhoff’s demise.

In his testimony delivered before the standing committees on finance, public accounts, trade and industry as well as public service and administration, Jooste revealed that, “in a move to gain a retail footprint in Europe”, Steinhoff went into partnership with Poco.

“Seifert’s interests in various furniture retailers were merged with that of Steinhoff, into a company called Poco and the two entities started working together on a number of transactions,” explained Jooste.

In February 2011, the “strategic partnership” between Steinhoff and Seifert bought a French furniture company Conforama. However, when Seifert was supposed to pay his part of the acquisition amount, he did not have the cash.

“Steinhoff paid the amount on Seifert’s behalf because I thought it was just a cash flow issue,” said Jooste.

After initiating that they buy Austrian furniture group Kika/Leiner because it competed with his stores, Seifert in 2013 again failed to come up with the cash to pay his part of the acquisition.

This led to a fall-out between Jooste and Seifert and, in 2014, Jooste ended the partnership.

According to Jooste, in retaliation, Seifert launched three lawsuits in the Netherlands, Austria and Germany “contending that Steinhoff did not acknowledge his shares in Poco and Conforama.”

LWS GmbH, a company linked to Seifert, claims to be a creditor of Steinhoff Europe AG, the parent company said.

Steinhoff was notified earlier this year that LWS planned to challenge a company voluntary arrangement for Steinhoff’s Europe operations, proposed on December 14.

Steinhoff investor relations officer Reina de Waal confirmed the dispute in an emailed response to questions.

Under the so-called company voluntary arrangement, Steinhoff wants to restructure its European debt by way of a new term loan facility to be issued by a newly incorporated Luxembourg company which shall sit as an indirect subsidiary of Steinhoff Europe.

“The company continues to work towards the implementation of the financial restructuring of the group and management continues to support and focus on the ongoing operations,” Steinhoff said in a statement.

Steinhoff anticipated publishing its group audited financial statements for 2017 and 2018 by April 18, “subject to any delay caused by the challenge to the company voluntary arrangement”.

It had been forced to abandon plans to publish both its 2017 and 2018 financial statements by the end of January, citing delays to the forensic investigation by PwC.

This morning, the Johannesburg-listed shares of Steinhoff were down 1.06% versus a 0.56% decline in the broader index. – Reuters

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you believe that the various planned marches against load shedding will prompt government to bring solutions and resolve the power crisis?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes
21% - 103 votes
No
79% - 395 votes
Vote