Deloitte agrees to pay out up to R1.3bn in compensation to claimants against Steinhoff

play article
Subscribers can listen to this article
  • Steinhoff's former auditor Deloitte has agreed to pay R1.3 billion (€70.34 million) in compensation to claimants suing the furniture and household goods conglomerate.
  • The auditor says it supports settling the claims to allow Steinhoff to "continue as a business" while forestalling "prolonged and costly litigation". 
  • The proposed payout is distinct from a R16 billion offer made by Steinhoff itself to settle claims against it. 

Steinhoff International Holdings says its former auditor Deloitte has agreed to pay up to R1.3 billion (€70 million) in compensation to claimants who are suing the Stellenbosch-headquartered conglomerate. 

Steinhoff is facing over 90 separate legal claims in South Africa, Germany and the Netherlands stemming from the precipitous drop in its share price in December 2017.

Last year, the group proposed what it termed a "global settlement" to settle these claims once and for all, albeit with no admission of liability or wrongdoing.

According to its latest term sheet, Steinhoff has proposed to pay out a total of roughly €900 million (about R16 billion) to settle all the claims it is facing. Settling would also give claimants "certainty of outcome".

In a market update on Monday, Steinhoff said that it had reached an agreement with Deloitte in the Netherlands and South Africa to "make additional compensation available to certain Steinhoff claimants".

Deloitte was replaced by Mazars as Steinhoff's auditors in September of 2019.

Some of the particulars of the scheme still have to be worked out, and it is contingent upon Steinhoff receiving favourable rulings in two upcoming court cases.

In a statement on Monday, Deloitte said the global settlement was in the "best interest of all stakeholders". 

"The settlement by Deloitte is not in any way an admission of any liability for the losses incurred by Steinhoff and its stakeholders as a result of the accounting irregularities at Steinhoff," said the auditor. 

"During the course of its 2017 audit, Deloitte uncovered accounting irregularities. In response to this discovery, Deloitte pushed Steinhoff to conduct the independent investigation that uncovered the complex management fraud which is the subject of the web of litigation and potential litigation resolved by the global settlement announced on 27 July 2020."  

In its market update, Steinhoff announced that Conservatorium, a US group that is pursuing claims against Steinhoff and previously alleged it would be treated unfairly under the current settlement version, would withdraw an application to appoint a restructuring expert. This should make it easier for Steinhoff's global settlement proposal to move forward. 

Update: This article has been updated with comment from Deloitte. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders