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updated 10:20 AM UTC, Dec 13, 2023

South Africa’s Steinhoff Offers $1 Bln To Settle Global Lawsuits

27 July 2020. JOHANNESBURG (Reuters) – South Africa’s Steinhoff has proposed to pay around $1 billion to settle outstanding legal claims following a massive accounting fraud, a fraction of the over 9 billion euros ($10.5 billion) claimants are seeking.

The announcement sent its shares up over 11% on Monday.

The more than 50-year-old retailer has faced stream of lawsuits after revealing holes in its accounts in December 2017, the first sign of the fraud estimated to total $7 billion, and is still battling to recover.

Chief Executive Louis du Preez said the company had been working for 12 months to put together the settlement, which will cover cases from the Netherlands to South Africa, and urged all claimants to support it.

“Although there is no certainty yet that we will be able to conclude this settlement, in our view these terms are firmly in the best interests of all stakeholders,” he said in a statement.

While creditors, regulators and claimants still need to approve the proposal, if accepted the settlement would remove a huge question mark over the struggling company’s survival.

Steinhoff would have to liquidate if required to pay more than 90 separate legal claims against it in full, it said, damaging the prospects of claimants getting paid and marking the end of what was once a prize South African company.

Dutch shareholder group VEB said it will publish its response to the proposal after trading hours close in the Netherlands.

Other claimants, including South African businessman Christo Wiese, did not immediately respond to requests for comment, while some could not be reached.

Totalling around $1 billion altogether with separate sums offered for different groups of claimants, the settlement covers only a fraction of the value of the claims following the scandal.

These stood at over 9 billion euros in 2019, according to Steinhoff’s annual report. Some claims would not be covered by the settlement, Steinhoff said.

The value would be paid in cash and shares in retailer South African retailer Pepkor, a Steinhoff subsidiary.

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