Steinhoff’s legal team says the main proceedings cannot start until all the applications, including an appeal to the Supreme Court of Appeal, have been heard.
- The first day of a court hearing into whether retailer Steinhoff is insolvent was taken up with new intervention bids, arguments to postpone the matter, and applications to appeal earlier rulings.
- Lawyers for Tekkie Town, which is bringing the winding-up application, argued it was time to “get the matter on the road”.
- But Steinhoff’s legal team says the main proceedings cannot start until all the applications, including an appeal to the Supreme Court of Appeal, have been heard.
A slew of new intervention applications may further delay the start of a court bid to have retailer Steinhoff declared insolvent and placed into provisional liquidation.
The winding-up application was set down to be heard over two days this week starting on Tuesday. But in the end the court did not hear any evidence related to the state of Steinhoff’s finances on day one. Instead, it dealt with matters relating to the interventions applications, as well a complex set of interrelated bids for postponement and applications for leave to appeal.
The liquidation bid is being brought by the former owners of Tekkie Town, who say they were “duped” by Steinhoff’s former CEO Markus Jooste into swapping valuable shares in the footwear chain they built from scratch for stock in Steinhoff. But the value of their Steinhoff stock plunged in late 2017 at the first signs of an accounting scandal.
Last week, in the first leg of the case, the Western High Court ruled that it had jurisdiction to hear the liquidation bid, even though Steinhoff’s ultimate holding company is registered in the Netherlands.
While Tekkie Town’s lawyers said they were ready to start arguing the merits of the main application on Tuesday, lawyers for Steinhoff said it was still too early to begin.
Three new parties
The court on Tuesday heard that three new parties had applied to intervene in the case.
They are Steinhoff’s former auditors Deloitte, Hamilton – which represents large SA fund managers – and a group called Demior Recovery Services, which says it is acting on behalf of 127 applicants.
Steinhoff, meanwhile, is seeking leave to appeal two previous rulings in the case. It also wants the liquidation hearing to be postponed while a separate appeal to the Supreme Court of Appeal is heard.
To complicate matters further, two other parties that had previously applied to intervene in the case but whose bids were dismissed want to bring applications for leave to appeal these rulings.
‘Get the show on the road’
Advocate Deon Irish, for Tekkie Town, argued that the correct time for appeals to be heard was at the end of the main case when the insolvency ruling is made. He also noted that judge had already dismissed a postponement application last week.
Irish argued that an appeal to the Supreme Court of Appeal might delay matters by up to ten months.
“We must get this show on the road,” he said.
But Advocate Arnold Subel, for Steinhoff, argued that the main case could not be heard given the number of applications for intervention, postponement and leave to appeal that had been lodged.
Too many matters were “still open”, he said.
Steinhoff wants the matter to stand down until it has argued for leave to appeal before the Supreme Court of Appeal. The retailer holds that Judge Hayley Slingers was wrong in law to rule that a South African court could hear the liquidation of an “external company” headquartered overseas.
In the end, Slingers adjourned proceedings until 11:30 on Wednesday. She asked that all sides meet to agree on a timetable to lodge papers in the intervention applications.
She may also give a ruling on whether the case will be postponed.
Meanwhile, Steinhoff also announced on Tuesday that it had raised R7.3 billion from the placement of 370 million shares in its subsidiary Pepkor Holdings, which owns PEP and Ackermans.
The sale will help fund its R25 billion settlement proposal with claimants who lost out in its 2017 share price plunge. Steinhoff has asked the Wester Cape High Court to sanction the settlement, after voting ended last week.