Steinhoff International Holdings Limited (SIHL) was a South African company which until December 7, 2015, was the holding company for more than 40 retail brands in over 30 countries, including MatressFirm in the United States, Poundland in England and Poco in Germany, among others. It has been listed on the Johannesburg Stock Exchange since 1998. Since December 7, 2015, Steinhoff’s primary listing has been on the Frankfurt Stock Exchange. In December 7, 2015, SIHL was succeeded by Steinhoff International Holdings N.V., which became the Dutch holding company for the Steinhoff retail empire. Nonetheless, Steinhoff’s headquarters and tax residence remain in Stellenbosch, South Africa.
Since at least June 26, 2013, Steinhoff and its management, who were audited by Deloitte South Africa, have been misinforming investors about the value of Steinhoff assets, certain off-balance sheet transactions and the overall financial transparency of business transactions. Through this misinformation, investors have been unable to properly value the Steinhoff securities, which traded at inflated prices. In June 2014, Steinhoff informed the public that it was planning to restructure itself to access European capital markets, but kept its improper accounting practices a secret. Between December 2015 and December 2017, and following accounting irregularity suspicions, Steinhoff more than once denied the existence of such irregularities. On December 5, 2017, Steinhoff started to disclose its problems. Steinhoff has since disclosed various details about improper accounting, improper valuations, insider dealings and off-balance sheet transactions. These accounting irregularities led to the delay in the publication of its 2017 financial results and also the acknowledgment that it will have to restate at least its 2015 and 2016 financial statements. Steinhoff may also have to restate its 2014 financial statements.
Steinhoff’s December 5, 2017 surprise disclosure of accounting irregularities, as well as long-standing CEO Markus Jooste’s announcement that he was leaving the company with immediate effect, shocked markets. The news caused a dramatic decrease in the value of both Steinhoff equity and debt securities. Particularly, Steinhoff’s stock price dropped from €3.10 on December 5 to €0.47 on December 8, 2017, a decrease of almost 85%, eliminating more than €10 billion of Steinhoff’s market value. Moreover, as of December 14, 2017, Steinhoff had outstanding liabilities of €10.7 billion, causing market concerns about its financial viability (considering that €2 billion worth of its debt matures in 2018). In the meantime, Steinhoff has raised over €1 billion in capital from the sale of certain assets and has been renegotiating its debt obligations with its creditors.
On January 2, 2018, Steinhoff announced that its 2017 accounts would be accompanied by restated financial statements for 2015 and 2016, and that its previous figures for those years could “no longer be relied upon.” On February 19, 2018, the Dutch Enterprise Chamber ordered Steinhoff to restate its financial statements for extended book year 2015-2016—due to the improper inclusion of the value of certain assets belonging to a former business partner.
In the meantime, various regulators and enforcement agencies in Germany, the Netherlands and South Africa are investigating not only the two major Steinhoff entities, but also the auditor, Deloitte South Africa and various former board members for a conspiracy to defraud the market and engage in illegal accounting practices dating back to, at least, 2013.
On February 19, 2018, the Dutch Enterprise Chamber ordered that Steinhoff must restate its financial statements for extended book year 2015-2016 because of the inclusion of the value of certain assets belonging to a former business partner.
In the meantime, various regulators and enforcement agencies in Germany, the Netherlands and South Africa are investigating not only the two major Steinhoff entities, but also Deloitte South Africa and various former board members for a conspiracy to defraud the market and engage in illegal accounting practices since at least 2013.
LHL ATTORNEYS INC., a leading complex and class action litigation law firm has filed a class action against Deloitte, Absa Bank, Standard Chartered Bank, Steinhoff, current and ex-Steinhoff directors and other defendants in Johannesburg, South Africa.
The classes represented are as follows:
excluding SIHL’s and Steinhoff NV’s and Steinhoff Africa Retail Limited’s (“STAR”) past or present subsidiaries, officers, directors, affiliates, legal representatives, heirs, predecessors, assigns, and all members of the individual defendants’ families and any entity in which any of the individual defendants has or had a controlling interest. (the “JSE 1 Class”)” ;
excluding SIHL’s, Steinhoff NV’s and STAR’s past or present subsidiaries, officers, directors, affiliates, legal representatives, heirs, predecessors, assigns, and all members of the individual defendants’ families and any entity in which any of the individual defendants has or had a controlling interest. (the “JSE 2 Class”)”; and
excluding Steinhoff NV’s past or present subsidiaries, officers, directors, affiliates, legal representatives, heirs, predecessors, assigns, and all members of the individual defendants’ families and any entity in which any of the individual defendants has or had a controlling interest. (the “FSE Class”)”.
Investors interested in pursuing claims against Steinhoff in South Africa are requested to register their support for this class action for damages. Registering will help to ensure that investors are properly informed about ongoing developments in this class action. Investors can register their support on a no-risk, no-cost basis with the Dutch foundation “Stichting Steinhoff International Compensation Claims” (the “Foundation”). The Foundation supports the all-inclusive class action efforts in South Africa and is coordinating and facilitating global efforts to recover damages in all appropriate jurisdictions, including South Africa, Germany and the Netherlands. The Foundation serves all member-investors with relevant exposure and all investors worldwide are invited to participate in the Foundation’s global investor recovery efforts.