LEWIS GROUP LIMITED - NCT Judgement

NCT Judgement

Lewis Group Limited
Incorporated in the Republic of South Africa
Registration number: 2004/009817/06
JSE share code: LEW
ISIN: ZAE000058236
("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

Sponsor: UBS South Africa (Pty) Ltd

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