Steinhoff’s liquidation can be decided in a South African court according to the High Court in Cape Town, who ruled against Steinhoff International Holdings N.V.’s (SIHNV) argument that a South African court does not have jurisdiction to liquidate the company.
Dismissing the application with costs, as well as the costs of two counsel, judge Hayley Slingers found that a South African court would have jurisdiction, while Steinhoff and the two other parties claimed that Steinhoff is an external company established in the Netherlands and cannot be liquidated in South Africa in terms of the Companies Act of 2008.
The applicants claimed that chapter 14 of the old Companies Act of 1973 is still valid for liquidating insolvent companies and the definition of a “company” includes an external company. The 2008 act has a separate definition for an external company.
The former owners of Tekkie Town applied for the liquidation of Steinho,ff because they say it cannot pay its debts any longer. The former Tekkie Town owners sold their business to Steinhoff five years ago for shares in SIHNV.
This is an important judgement as it shows that external companies cannot make debts in South Africa and not be liquidated because they are not registered here.