South African news today

SOUTH AFRICA – August 2008: Markus Jooste, CEO of Steinhoff. (Photo by Gallo Images / Financial Mail / Jeremy Glyn)

Steinhoff sued for R185 billion in damages relating to investor losses

The Steinhoff saga continues.

South African news today

SOUTH AFRICA – August 2008: Markus Jooste, CEO of Steinhoff. (Photo by Gallo Images / Financial Mail / Jeremy Glyn)

Steinhoff, the embattled South African international retail holding company, is being sued by battered shareholders for damages amounting to R185 billion.

The Steinhoff saga rages on, and shareholders are not letting former CEO, Markus Jooste, off the hook, following the complete collapse of stock prices towards the end of 2017.

Steinhoff: The biggest corporate scandal in South Africa

It’s been labelled the biggest corporate scandal in the history of South Africa. Dubious accounting irregularities attributed to Jooste resulted in $11.4 billion being wiped out by the company, with a debt of R161 billion being revealed through further investigations.

Shareholders who had entrusted Steinhoff and Jooste with their investments lost billions of rands, literally overnight, as the share price dropped from R51.40 to below R4.50.

Now, shareholders have banded together in an attempt to recoup losses, which they say totals R185 billion.

As reported by CNBC Africa, the lawsuit’s claims are on behalf of investors, who purchased Steinhoff shares in the period from at least June 2013 to December 2017.

The South African litigation firm, LHL Attorneys Inc, is handling the mammoth civil action lawsuit on behalf of investors seeking compensation.

Lawsuit against Steinhoff and friends

While the main allegations of incompetence and liability are levelled at Steinhoff; it’s not the only company facing the wrath of scorned investors.

Other parties which are to be held accountable for serious fund mismanagement are Dutch incorporated Steinhoff International Holdings NV, it’s South African predecessor Steinhoff International Holdings., Absa, Germany’s Commerzbank AG, UK-based bank Standard Chartered Bank, and auditors Deloitte and Rödl & Partner,

Several former and current board members including former CEO of Steinhoff International Holdings and Steinhoff International Holdings, NV, Markus Jooste, former CFO Ben la Grange and ex-Chairman and South African billionaire Christo Wiese, are also set to face the music.

The litigants have full backing from the Steinhoff International Compensation Claims organisation, which exists to assist parties hoping to recoup wasted funds.

Zain Lundell, of LHL Attorneys, explained why this calls action lawsuit is necessary within the South African context, saying:

“Steinhoff has operated and continues to operate in and out of South Africa. Steinhoff’s shares pre-December 2015 were listed on the JSE and its post-December 2015 shares are registered and traded on both the JSE and FSE. Thousands of South African shareholders have been affected by the defendants’ conduct, including the largest pension fund in South Africa, so it was a logical decision to commence this true opt-out class action proceeding here in South Africa.”