join@steinhoffclassaction.org
Steinhoff Litigation Update – April 2019
To investors represented by the International Steinhoff Litigation Group (ISLG):
Substantial developments have occurred in the collective, multi-jurisdictional litigation efforts against Steinhoff
and other defendants in the various jurisdictions. Further, the recently published summary of the PWC report
and confidential information available to us, validate important allegations in our complaints relating to
company fraud and negligence. As such, we believe that our approach of pursuing certain directors for gross
negligence, the board and Steinhoff itself, for violation of corporate governance obligations, as well as Deloitte
for violation of accounting and auditing standards, all have strong chances of success. The forthcoming
releases of the corrected financial statements for 2015 and 2016, as well as the yet unreleased 2017 and 2018
statements will likely further strengthen our case.
Timeline of cases around the world:
South Africa
In the opt-out class action in South Africa, which seeks to represent all shareholders of the old (pre-December
5, 2015) and new Steinhoff, all domestic defendants have been served. Court documents for defendants based
in France, Belgium, Germany and the Netherlands have been sent via international diplomatic channels for
final local service and will be completed imminently. Importantly, the South African class action represents the
most comprehensive proceeding against wrongdoers, with over 30 named parties which we seek
compensation from, including Steinhoff, over 20 past and present directors, and Deloitte.
Various South African authorities are investigating Steinhoff and related parties, and they are constantly
uncovering new pieces of useful information. Presently, the South African Parliament, the South African
Financial Prosecutors (Hawks), the South African Institute of Chartered Accountants (SAICA), the Financial
Sector Conduct Authority’s (FSCA) and the Independent Regulatory Board for Auditors (IRBA) are conducting
investigations into Steinhoff and other defendants. The products of these investigations will prove critical to
litigation efforts in all jurisdictions given that the majority of witnesses and evidence against Steinhoff is to be
found in South Africa.
Timeline of the South African Class Action
• July 29, 2019: Deadline to file supplementary papers (including expert reports regarding accountancy
and corporate governance issues with Steinhoff) for class certification purposes; and
• August 20, 2019: Meeting set to determine hearing schedule for the certification process of the South
African class action between all parties included in the class action. Given the importance of this case,
it is being personally managed by a highly experienced and respected commercial Judge of the
Johannesburg High Court, who, given the cases’ significance, has indicated that he will expedite the
matter through the court system.
The Netherlands
Two active cases are currently pending in the Netherlands, while other cases have just been announced or
filed but not served, or also stayed. Our case is currently the only active civil litigation claim against Steinhoff
(SIHNV) and Jooste on behalf of members of the Foundation, i.e. all shareholders, and is proceeding towards
its first hearing in November 2019, which will deal with interim motions.
The second active case is an inquiry proceeding before the Amsterdam Enterprise Chamber, which was
initiated by another group of shareholder representatives. The Enterprise Chamber may investigate potential
mismanagement; this does not determine liability of Steinhoff, but determines facts underlying mismanagement
which can be used in civil cases by all parties to the inquiry proceeding. The ISLG, through its Foundation, has
intervened as an interested party in this proceeding to ensure it can use facts from the investigation for its
benefit.
Timeline of Foundation Class Action
• March 13, 2019: Parties agreed on a case management schedule covering all phases of the
proceedings.
• April 10, 2019: SIHNV has filed ancillary objections (jurisdiction, competence, etc.) concerning
jurisdiction / admissibility of Foundation. Jooste has submitted framework/table of contents of ancillary
objections to SIHNV and Foundation;
• May 8, 2019: Jooste to file ancillary objections concerning jurisdiction and, possibly, inadmissibility of
Foundation;
• June 5, 2019: Foundation to file a statement of defence regarding the ancillary objections (and,
possibly, ancillary claim for the purpose of compulsory disclosure of evidence (exhibitieplicht);
• July 17, 2019: SIHNV to file a statement of defence in ancillary objections (if relevant); SIHNV and
Jooste (possibly) to file ancillary claims concerning permission to serve a third-party notice on other
parties (vrijwaring) / forced intervention of a third party (gedwongen tussenkomst);
• November 11, 2019: Oral hearings;
• Subject to the court calendar (early 2020): Decision on ancillary objections.
Germany
Since December 2017, approximately 50 lawsuits before 17 different chambers, have been filed against
Steinhoff in the Lower Regional Court of Frankfurt. Several chambers have already publicly declared
applications for a model case under the German Capital Markets Model Case Act (KapMuG) admissible,
hence, it is expected that the Lower Regional Court of Frankfurt will order the matter referred to the Higher
Regional Court of Frankfurt for the establishment of the model case in May/June 2019, followed by a
subsequent appointment of a model case plaintiff. We expect the model case plaintiff to come from our group,
which is the largest and most numerous in Germany. After the public announcement of the model case plaintiff
and within a period of 6 months after this, claims of aggrieved investors may be registered with the Higher
Regional Court of Frankfurt.
Timeline of the Model Case
• May/June 2019: Order to refer the matter to the Higher Regional Court of Frankfurt;
• September 2019: Selection of model case plaintiff/beginning of 6-month deadline for claim registration;
• January2020: Start of the model case proceeding and oral hearings before the Higher Regional Court
of Frankfurt.
As our cases against Steinhoff proceed in the different jurisdictions, the pressure on the company, and
implicated third parties such as the directors and auditors, increases substantially. We believe the combined
efforts of the Foundation and ISLG put the Group in the best position to demand negotiation and a speedy
resolution of the matter, as well as offering a multi-jurisdictional platform to resolve all outstanding litigation with
final, binding effect. In effect, we believe the Group is the only vehicle by which all risk in the different
jurisdictions can be wiped off the table for the defendants – a critical factor for any defendant thinking of
settling. Joining the ISLG’s effort is still important as size matters for purposes of negotiation leverage. You can
register your support for the ISLG efforts at www.steinhoffclassactions.com. Please contact
investorclaimsagainststeinhoff@drrt.com with any inquiries.
Edited by Tom, 18 April 2019 - 06:41 PM.
