AFP
Wire Service
1 minute read
23 Mar 2021
4:56 pm

Insurers offer R1.3 billion to bailout beleaguered Steinhoff

AFP

Steinhoff, which is listed in both Frankfurt and Johannesburg, is under investigation for fraud after it disclosed a €6 billion hole in its accounts in December 2017.

Embattled retail giant Steinhoff on Tuesday said some of its insurers had agreed to contribute $93 million (R1.37 billion) to settle legal claims that have rocked the company since fraud allegations surfaced in 2017.

Steinhoff, which is listed in both Frankfurt and Johannesburg, is under investigation for suspected fraud after it disclosed a six billion euro hole in its accounts in December 2017.

The furniture and clothing retailer is still struggling to recover from the scandal, which caused a dramatic plunge in its share prices and triggered a string of high-profile resignations.

ALSO READ: EFF not happy with Steinhoff report

In a statement on Tuesday, the company said it had “reached an agreement with certain insurance companies underwriting Steinhoff’s… directors and officers”.

The insurers will contribute up to 78.1 million euros ($93 million) to resolve various litigation and claims against the Steinhoff group, including compensation for market purchase claimants “in exchange for certain waivers and releases”.

The deal follows a 77.94-million-euro settlement by Steinhoff’s former auditor Deloitte last month.

Overall, Steinhoff has proposed a $1 billion global lawsuit settlement plan to resolve around 90 legal claims from aggrieved shareholders and business partners in Germany, the Netherlands and South Africa.

German prosecutors meanwhile pressed fraud charges against four people in connection with the case earlier this month.

ALSO READ: ‘Nothing irregular’ about Steinhoff funding Hawks investigation, says NPA

The accused reportedly include former chief executive Markus Jooste, according to local media.

Jooste resigned after the scandal broke but denied all knowledge of accounting fraud.

Steinhoff was fined 13.5 million rand ($912,000) by the Johannesburg Stock Exchange last October for breaching listing requirements including publishing “false and misleading” information.

AFP

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