LEWIS GROUP LIMITED - LEW01 - NCT Judgement

LEW01 - NCT Judgement

Lewis Group Limited
Incorporated in the Republic of South Africa
Registration number: 2004/009817/06
JSE share code:
LEW01 ISIN: ZAG000110222
("the group")

NCT JUDGEMENT

Shareholders are advised that the National Consumer Tribunal (“NCT”) delivered its judgment and
reasons in the following matter: THE NATIONAL CREDIT REGULATOR (“NCR”) / LEWIS STORES
(PTY) LTD (“Lewis”) and MONARCH INSURANCE COMPANY LTD (“Monarch”) – CASE NO.:
NCT/27651/2015/140 (P) NCA (“the judgment”) on 14 September 2016.

In terms of the judgment, the NCT:

    1. dismissed the NCR’s application against Monarch;

    2. found that the investigation and referral of the complaints against Lewis by the NCR was valid;

    3. found that the offering of loss of employment insurance by Lewis to pensioners or self-
       employed consumers was unreasonable and therefore constituted prohibited conduct under the
       National Credit Act (“NCA”);

    4. found that the offering of disability insurance by Lewis to pensioners would be unreasonable,
       unless further enquiry and clarification was obtained and recorded, which makes it clear that
       such consumers requested such insurance cover;

    5. found that the offering of disability insurance by Lewis to self-employed persons was not
       unreasonable;

    6. found that there is no clear basis on which the unreasonableness of the disability and loss of
       employment insurance ties to a specific provision in Lewis’s credit agreements which has the
       effect of deceiving consumers;

    7. found that the NCR did not submit any evidence of the way in which consumers were allegedly
       deceived by Lewis;

    8. found that it is unable to make a finding that Lewis uses additional or supplementary
       agreements to circumvent the purposes of the NCA; and

    9. ordered that an independent audit be done of all credit agreements entered into by Lewis since
       2007, for purposes of determining whether any pensioners or self-employed consumers were
       sold loss of employment insurance and whether any pensioners were sold disability insurance.
       If so, Lewis is to reimburse such consumers with any premiums and any interest charged on
       their accounts as a result of such insurance premiums. Consumers who no longer have open
       accounts with Lewis are to be traced and reimbursed. The independent audit to be completed
       at Lewis’ cost within 120 days and the audit report is to be furnished to the NCR within 150
       days. Thereafter the NCT will set the matter down for hearing on the quantum of the
       administrative penalty to be imposed. In this regard, we remind shareholders that Lewis has
       already carried out its own investigation in regard to loss of employment insurance sold to
        pensioners and self-employed consumers, and has to date reimbursed the premiums paid
        together with interest thereon, to more than 90% of such consumers.

Lewis will be considering the judgment with its legal advisors for purposes of determining the next steps
to be taken by it in this matter, and shareholders will be kept advised on developments.

Cape Town
15 September 2016

Debt Sponsor: Absa Bank Limited (acting through its Corporate and Investment Bank division)

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