Steinhoff’s claimants clash-Moneyweb

If Steinhoff’s contractual claimants, such as Christoffel Wiese-related entities and GT Ferreira, are treated like thousands of shareholders who have bought shares in the market, Wiese’s proposed payments are 7.9 billion. Reduced from Rand to Ran 1 billion, Ferreira states that the parties acting on behalf of about 20% of Steinhoff’s shareholders are Rand 421 million to Rant 29 million.

read: Steinhoff’s proposal is firing


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Dublin-based Hamilton manages class actions on behalf of major institutional investors such as Ninety One, Allan Gray, Old Mutual, Coronation and Sunram, making the proposed settlement agreement unfair and discriminatory. I blamed it as something.

Hamilton said in a letter sent to Steinhoff’s customers last week that he continued to resist the settlement and continued his aggressive litigation strategy in the Netherlands and South Africa.

Hamilton divides the claimant into a market purchase claimant (MPC), which makes up the majority of Steinhoff’s shareholders, and a contract claimant (CC), such as Wiese-related entities and former banker Ferreira. I disagree with the grounds.

Different treatments for different groups

Steinhoff then uses a variety of mechanisms to calculate two categories of claims in a way that benefits CC and discriminates against MPC. Wiese’s Thibault claim is “recognized as 92% of the total purchase price of the shares, and GT Ferreira and other contractual claimants’ claims are recognized at 94% of the full acquisition price.” It has been.

In contrast, Hamilton states that all MPC claims are subject to the so-called “inflation” loss methodology, rather than being considered as a percentage of the full purchase price.

In addition, explain that it must have been a very complex exercise.

“Under this method, economists briefed by Steinhoff commented on how the daily stock price from March 2009 to December 2017 was overvalued as a result of Steinhoff’s misconduct. MPC bills are limited to this amount of inflation. Steinhoff’s daily suggested inflation rate ranges from 1% to 81% of the daily closing price. On average, the inflation rate is just a small closing price. 40%. ”

What does this do to the numbers

Hamilton says that if CC’s claims had been put into the same process, they would have been valued at a much lower price.

For example, Thibault’s claim (as CC) was valued at R31.8 million. When evaluated in the same way as MPCs, it is reduced by 48% to R15.4 million.

Similarly, Ferreira’s claim was valued at R $ 1.1 billion, but when the “inflation” loss methodology was applied, it fell 40% to Ran 437.9 million.

Further prejudice

The prejudice suffered by MPC does not end with the methodology of “inflation” loss. Hamilton explains that the “recovery rate” that applies to various bills is also significantly lower for MPCs.

“Steinhoff applies a recovery rate of only 5% to Hamilton’s claims, compared to 18.7% for Christoffel Wiese entities and 29.3% for other contractual claims.”

The combined impact will be 7.8 times more likely to be received by the proposed settlement than if the Wiese entity were treated in the same way as MPCs. The contractual charges by Ferreira et al. Are set to be 14.7 times higher than if they were treated the same as MPCs.

Steinhof’s reaction

Steinhoff says that inflation loss methodology is a recognized basis for assessing the amount of claims claimed by claimants in class proceedings and allocating settlement consideration between them.

“Steinhoff thinks it’s the right approach to use here,” he says.

It defends the different grounds for the allocation between MPC and CC because CC asserts its allegations on the basis of a direct deal with Steinhoff, who culminated in a share acquisition agreement.

“Such claimants claim the legal right to cancel or cancel the contract under a contract allegedly concluded on the basis of misrepresentation by Steinhoff’s representative in pre-contract negotiations, from Steinhoff to shares. We will try to claim the consideration paid, “says Steinhoff.

He adds that the methodology behind CC allocation reflects the legal nature of CC’s claims.

In addition, Steinhoff relies on a High Court ruling issued last year in a class action proceeding against the company by retired pensioner Ancia de Bruin.

“This case shows that the lack of a direct deal with Steinhoff means that there are higher legal hurdles for the MPC in establishing its SIHPL. [Steinhoff International Holdings Proprietary Limited] We have legal liability to them for the purchase of shares, “says Steinhoff.

Scam, not negligence

However, Hamilton dismissed De Bruin’s case in the letter, saying, “This new claim was made by a small Johannesburg-based law firm for personal injury and was based on a complaint of negligence.” Stated.

Hamilton adds that the allegations were raised on the same basis as alleged fraud by many contractual allegations, namely Steinhoff and Marx Jost and other directors.

Another concern that Hamilton raised in his letter was that Steinhoff, unlike the MPC, did not take into account the fact that the CC had the ability to perform its own due diligence prior to the acquisition of shares. And the claim filed by Wiese’s family is “a petition for an oral contract with then-CEO of Steinhoff, Markus Jooste.”

In addition, Hamilton states that since 2013, as a member of Steinhoff’s board of directors, Weese has been placed more than anyone else to understand Steinhoff’s true position.

“To the extent that Tibaud was confused by Steinhoff, this was the responsibility of the board and Steinhoff’s executives, including Mr. Wiese,” Hamilton said.

“It is difficult to be compensated because the plaintiff was misunderstood on its own.”

Steinhoff’s claimants clash-Moneyweb

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