Christo Wiese-linked retailer Steinhoff receives approval for $1.6-billion global settlement for investors

Steinhoff International Holdings, a South Africa-based global retail holding linked to retail mogul Christo Wiese, is on track to pay investors a $1.6-billion (R24.4 billion) settlement in accordance with the high court approval that it received in Cape Town, South Africa’s largest city.

Steinhoff has retail operations in more than 30 countries and over 6,500 retail outlets under 40 different brands. The retail behemoth was founded in 1964 by German billionaire Bruno Ewald Steinhoff and is listed on both the Johannesburg and the Frankfurt stock exchange.

The high court’s approval is consistent with plans to resolve more than R122 billion ($8 billion) in combined claims stemming from the retailer’s 2017 accounting scandal, which resulted in the resignations of Markus Jooste and Christo Wiese.

The move represents a long-standing effort to resolve protracted years of legal battles to regain investor confidence and get the company’s operations back on the path of sustainable earnings.

On Feb. 15, the settlement offer will be paid to the 90,000 shareholders who lost a significant volume of money as a result of the accounting scandal.

In response to the announcement, the company’s stock rose by more than 2.03 percent to R4.52 ($0.29) per share at the time of writing, indicating investor support for the proposed settlement.

Wiese, a South African businessman who was the company’s largest shareholder in 2017, revealed that the settlement plan had already been signed off on in the Netherlands, where Steinhoff is registered, and that some parties who initially opposed the deal had agreed to settle.

“Though no doubt there will be further chapters, because the people responsible for the fraud, that still has to be sorted out,” he said.

Steinhoff has been fighting for survival for more than four years, ever since a Deloitte audit report revealed an accounting fraud that resulted in a drop in the company’s share price and valuation, which quickly escalated to police and regulatory investigations in Europe and South Africa.

A slew of inflated profits and asset values later surfaced, forcing the company to sell a variety of international retail assets to raise funds.

Not long ago, Mattress Firm Group, a mattress business unit linked to the organization, applied for an IPO of its common stock in line with the New York Stock Exchange (NYSE) regulatory listing process as part of Steinhoff’s strategic plans to secure long-term profitability.