Amsterdam - Steinhoff International [JSE:SNH] has lost a case against a former business partner related to how it reported financials for 2016, piling further pressure on the global retailer that’s battling an accounting scandal.
The owner of French furniture chain Conforama, Mattress Firm in the US and Pep clothing in Africa should amend its accounts for that year, the Amsterdam Enterprise Chamber ruled on Monday in a case brought by Andreas Seifert’s OM Handels and MW Handels businesses.
The lawsuit pre-dates the reporting by Steinhoff of financial wrongdoing that’s wiped almost 90% off the value of the company.
OM had accused Steinhoff of committing false accounting by not acknowledging its shareholdings in POCO Einrichtungsmarkte GmbH, a German furniture retailer. It’s one of three European cases Seifert’s businesses have brought against Steinhoff, which reported wider financial wrongdoing in early December.
Steinhoff, which is registered in Amsterdam and has its main base in South Africa, has already said it needs to restate 2016 accounts alongside financials for 2015 and 2017.
Nevertheless, the ruling may be indicative of how other legal authorities rule on the company, which is being investigated by regulators and courts in various jurisdictions and is in regular talks with lenders about maintaining liquidity.
Former chief executive officer Markus Jooste has been referred by Steinhoff to the Hawks, while former chairperson Christo Wiese and major investor has resigned and been forced to sell a large portion of his shareholding.
The company has appointed PwC to investigate the wrongdoing.
The Dutch Enterprise chamber ruled that Steinhoff must account properly for the correct ownership structure of POCO, and pay OM Handels’s legal costs of €3 398.
Steinhoff shares fell 0.4% to €0.38 on Monday in Frankfurt, where the retailer has its primary listing. The stock has recovered about 19% in 2018 after December’s freefall.
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