Tekkie Town founder sues STAR, Pepkor for R41.6m

Braam van Huyssteen in his Tekkie Town store in George. (Photo: File, Netwerk24)
Braam van Huyssteen in his Tekkie Town store in George. (Photo: File, Netwerk24)

Tekkie Town founder Braam Van Huyssteen is suing Steinhoff Africa Retail (STAR) and Pepkor Speciality for breach of contract.

He claims in court documents that, due to the breach of his employment contract as managing director of Tekkie Town, he is losing out on remuneration, bonuses and other incentives totalling R41.6m, which he could have earned until 2021.

He wants STAR or Pepkor to pay him this amount with interest, or provide him with suitable alternative relief.

STAR told Fin24 that it is obtaining legal advice in the matter and "will take the necessary action".

Tekkie Town was bought by Steinhoff International in late 2016. It was later transferred to STAR, the JSE-listed company that contains Steinhoff's African retail assets.

STAR is changing its name to Pepkor Holdings.

Tekkie Town operates more than 380 stores within STAR’s total retail footprint of more than 5 100 stores.

A dispute had arisen earlier this year between Van Huyssteen and STAR, regarding an "earn-out agreement".

Fin24 reported on Tuesday that an agreement was reached in the Western Cape High Court on Tuesday in a separate case between Steinhoff Speciality Fashion and Footwear and former Tekkie Town executives, including Van Huyssteen and former CEO Bernard Mostert.

The executives resigned on 25 June, blaming what Mostert calls an environment "impossible for us to achieve the desired results for the business" because of the way they had been treated.

Earlier in July Steinhoff Speciality Fashion and Footwear obtained an interim interdict against the Tekkie Town founder and three other former top executives to stop them from what STAR deemed to be "interfering with IT systems and 'destabilising' operations".

"STAR achieved its aim in the Western Cape High Court yesterday when all parties agreed to a court order finding that access to and interference with the Tekkie Town IT systems, servers, networks and hardware or software – whether in stores or head office – is expressly prohibited by two ex-Tekkie Town executives, Willem Wait and Anton Roetz," STAR said in a statement on Wednesday.

"Further, all respondents including Tekkie Town founder Braam van Huyssteen and Mostert are strictly prohibited from using any Tekkie Town confidential and proprietary company information. The ex-Tekkie Town executives, as well as their related companies are also required to destroy any copies of records pertaining to Tekkie Town in their possession."
STAR said the outcome of the settlement was a positive one for Tekkie Town and STAR, "as it validates our original concerns and responses".

STAR CEO Leon Lourens said in the statement that STAR and Tekkie Town would continue to use the necessary legal process to protect the business and this includes the possibility of criminal charges.  
According to Lourens, the Tekkie Town business has been stabilised with the deployment of the interim management team and trading remains in line with expectations.

"Tekkie Town remains an important business within STAR and we will continue to defend it in the interest of our shareholders and the 3 000 employees at Tekkie Town," said Lourens.

Meanwhile, the former Tekkie Town executives said in their own statement that they had "proven" that STAR "misled" the court when it obtained the interim interdict at the beginning of July.  
The former Tekkie Town executives, on the other hand, question Pepkor’s motives in applying for an interdict in the first place.

Mostert said in a statement on behalf of the respondents that the main point of their answering affidavit was that Pepkor "misled the court by misrepresenting several material facts and did not make several material disclosures that would have impacted a decision in an ex-parte order".

"We successfully argued that we were legally entitled to copies of our personal and business e-mail messages from the Tekkie Town servers. We used our e-mail addresses for all our business communications – from the earliest years when Tekkie Town started and long before Steinhoff appeared on the scene. These are big businesses valued at more than R2bn and not related to Pepkor or their parent Steinhoff at all," said Mostert.

The respondents also argued that the use of Tekkie Town and related e-mail addresses to manage other business affairs were known to Steinhoff and acceptable as such.
Court documents submitted by the respondents included an affidavit by Roshan Harneker, a computer forensic expert, which states that it would be impossible to access Steinhoff's or Tekkie Town's computer network from a retail shop to the point of being able to sabotage its sophisticated computer network. It was stated as fact to the court that Steinhoff had complete control over all the computer systems from 28 June.

Furthermore, the answering affidavit points to several acts of questionable conduct on the part of Pepkor employees, such as gaining access to Mostert's office – despite it being securely locked – and gaining access to printed information of private business transactions and documents relating to the respondents’ litigation against Pepkor. The respondents claim this was done on orders from Lourens.

According to the statement by the former Tekkie Town executives, these actions are being investigated by the SA Police Service.

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