Steinhoff shares fall as ex-chairman sues retailer

Steinhoff shares are lower amid news former chairman Weise is suing the troubled retailer.

Steinhoff shares fall as ex-chairman sues retailer

Troubled retailer Steinhoff shares are lower Thursday amid reports the firm’s ex-chairman Christo Weise is suing the business for damages related to investments he made into the retailer during 2015 and 2016. Weise is said to be suing the business for 59 billion rand, or some $4.8 billion.

Meanwhile, investors remain unhappy with the current situation at Steinhoff, despite the troubled retailers’ efforts to bestow calm and confidence at its recent shareholder AGM.

By 1450 BST, Steinhoff shares were trading 13.91% lower at €0.13. The stock continues on a downward slope after losing most of its value in December after an accounting scandal broke.

Weise attempts to claw back investments

Weise, who resigned from his role as chairman shortly after the accountancy problems were made public in December, has issued the proceedings via his own business, Titan Group.

Weise is reportedly making two claims against Steinhoff. The first is regarding Steinhoff’s purchase of Pepkor, in which Titan subscribed for shares of the discount retailer.

The second claim relates to an injection from Titan Group into Steinhoff in 2016 to support its purchase of US business, Mattress Firm.

According to a Bloomberg report, Weise has confirmed the legal action to them.

Steinhoff investors remain uncertain

This latest report relating to Steinhoff’s financial woes will likely be more unwelcome news for the firm’s investors and creditors.

At its first AGM since the crisis broke last year, Steinhoff failed to ease investors’ concerns over the retailers plans for the future. In addition, question marks remain over exactly what happened with the retailers’ accounting problems and shareholders need to wait until towards the end of 2018 before they gain more information on that.

Separately, Steinhoff confirmed the sale of its Hungarian electronics retailer, Extreme Digital. Hungary’s competition commission has approved Steinhoff’s sale of its 50.4% holding of the business.

And, Steinhoff has also agreed to sell half of its German furniture chain POCO, to former business partner, Andreas Seifert.

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