NEWS
05/02/2018 06:31 SAST | Updated 05/02/2018 06:31 SAST

Steinhoff Served With Summons By Dutch Investors

Steinhoff's Dutch investors are suing the group for misleading them in its financial statements.

Two Mattress Firm stores, a brand owned by Steinhoff, are shown on either side of the street in Encinitas, California, U.S., January 25, 2018.
Mike Blake / Reuters
Two Mattress Firm stores, a brand owned by Steinhoff, are shown on either side of the street in Encinitas, California, U.S., January 25, 2018.

Dutch investors have instituted legal action against Steinhoff over alleged accounting fraud committed by the firm, Business Day reported on Monday. Steinhoff was reportedly served with a summons by the Dutch Investors Association (VEB) and European Investors on Friday.

This is the latest in a series of actions taken against the group, including a compliance notice issued against the company by the Companies and Intellectual Property Commission of SA, which gives Steinhoff six months to identify the people involved in falsifying their records and instituted criminal action against them.

The investors reportedly say Steinhoff acted unlawfully by giving its shareholders incorrect information in its annual reports.

Steinhoff reportedly asked the VEB to wait until a PriceWaterhouseCoopers investigation made progress, but the investors were unhappy with this, according to Business Day.

Steinhoff is also facing lawsuits from its German and South African investors.

Steinhoff CEO Markus Jooste resigned in December after allegations of massive accounting fraud emerged.

Steinhoff is registered in South Africa and its primary listing in Frankfurt. However, its head office is in Amsterdam. Steinhoff also reportedly faces a class action in Frankfurt on behalf of German investors. Dutch authorities are also investigating Steinhoff's auditors, Deloitte.

On Friday, Steinhoff said it would suspend dividend payouts until the end of June in an attempt to save money, according to Eyewitness News (EWN). The company is reportedly scrambling to sell assets and find funds to save the crumbling group, which lost billions in market share after the allegations surfaced.

Steinhoff reported Jooste to the Hawks in January. The group appeared before Parliament last week.

Meanwhile, the South African Reserve Bank (SARB) is deciding whether Steinhoff will be allowed to take money out of the country to assist with its financial troubles abroad, according to eNCA.

The company reportedly wants to move money to its European operations.

SARB deputy governor Kuben Naidoo reportedly said the SARB has to evaluate Steinhoff's request "very carefully".

"On the one hand, we don't want too much money leaving South Africa, and on the other hand, if those liquidity issues are not managed then you will have a disorderly unwinding of the group. Given the structure of the group, it will increase the losses and the potential likelihood of job losses in South Africa," he reportedly said.