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Former Steinhoff chairman Wiese open to talks over $4 bln claim
* Wiese suing Steinhoff for 59 bln rand in damages
* Wiese says allegations he was involved are "insane"
* Investigators found $7.4 bln accounting fraud
(Adds shareholder group comment)
By Tiisetso Motsoeneng
JOHANNESBURG, March 18 (Reuters) - Former Steinhoff
chairman and top shareholder Christo Wiese said on Monday he is
open to negotiations over a $4 billion claim against the South
African retailer, days after it revealed the scale of a
devastating accounting fraud.
Steinhoff said on Friday that an independent report had
found it overstated profits -- which were signed off by Deloitte
-- over several years in a $7.4 billion fraud involving a small
group of top executives and outsiders.
It did not name the individuals but said those implicated
were no longer employed by Steinhoff, which first disclosed the
hole in its accounts in December 2017, knocking 90 percent off
the value of its shares and triggering investor lawsuits.
With a stake of about 20 percent which he acquired in 2014
when he sold his clothing retailer Pepkor to Steinhoff
in exchange for shares, Wiese was particularly hard hit by the
crash in its stock price.
"I would expect Steinhoff to give me back my money, and I
will give them back their worthless shares," Wiese told Reuters.
"But everybody knows the company does not have that kind of
money, so our approach has been that the only way forward is for
all the stakeholders to sit around the table and reconstruct the
company," Wiese added.
Wiese's claim, which he made public last year, is more or
less equivalent to the market value of Pepkor but seven times
more than the market value of Steinhoff.
Steinhoff, which declined to comment, owns 70 percent of
Steinhoff, which is also listed in Frankfurt and is
registered in the Netherlands, is also facing a class action
lawsuit from Dutch shareholder group, VEB.
VEB is seeking unspecified compensation from Steinhoff and
its auditor at the time, Deloitte, for damages suffered from
misleading information on the financial health of the company.
"As far as VEB is concerned, this report in no manner, shape
or form influences our action. It does nothing to frustrate it,
it does nothing to make it more tenuous or anything," spokesman
Armand Kersten said.
VEB, which says it has recouped 2 billion euros for
investors in various companies over the years, suspended the
class action litigation in October until April 3 to allow the
company to focus on cleaning up its balance sheet.
Deloitte, whose refusal to sign off on the 2017 earnings
report sparked the investigation, has denied any wrongdoing.
Wiese, who is one of South Africa's best-known business
figures, dismissed any suggestion of wrongdoing.
"People that are making these allegations are insane, or I'm
insane. What sane person will put 60 billion rand into a company
that he knows is riddled with fraud?," Wiese asked.
Wiese was one of the early executives of Pepkor, which was
co-founded by his parents in the 1960s in Upington on the
southern edges of the Kalahari desert.
He is best known for transforming grocery retailer Shoprite
from six shops in the 1970s to hundreds across Africa.
The 77-year-old was also instrumental in reinventing
Steinhoff, helping to expand it from discount furniture to a
sprawling global retail conglomerate selling everything from
mattresses and televisions to shoes and clothing.
Pepkor's chief executive, Leon Lourens, welcomed the
findings of the summarised investigation report, which said his
company financial statements were clean.
Shares in Steinhoff, which 15 months ago was valued at 224
billion rand, were up more than 5 percent at 1.94 rand, valuing
it at around 8 billion rand ($554 million).
($1 = 14.4487 rand)
(Reporting by Tiisetso Motsoeneng
Editing by David Holmes and Alexander Smith)
First Published: 2019-03-18 12:53:43
Updated 2019-03-18 16:24:49
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