Steinhoff class action suit gets SA institutions’ nod

South African asset managers have thrown their weight behind the class-action suit that is being instituted against Steinhoff by Dutch law firm BarentsKrans. 

The institutions that are encouraging their clients to participate in the BarentsKrans case include Abax Investments, Allan Gray, Bateleur Capital, Coronation, Denker, Electus, Eskom, Investec Asset Management, Investec Wealth & Investment, Momentum, Old Mutual, Sanlam, Tantalum Capital, Truffle and Visio Capital. This collective represented about 20% of the total shareholding in Steinhoff at the time the company’s share price collapsed.

In January, the law firm announced the commencement of legal proceedings on behalf of Steinhoff investors. It asked that investors who had acquired Steinhoff shares between June 2013 and the 6th of December 2017 register online to participate. As Steinhoff’s shareholders seek to pursue claims on behalf of their clients and funds that suffered losses because of Steinhoff’s share price collapse, South African institutions have taken on a new route- informing their clients that the ‘class action’ case being run in the Netherlands by the Dutch law firm BarentsKrans, is their preferred legal route.

“The decision by many of South Africa’s largest institutional investors to participate in the BarentsKrans Steinhoff litigation follows a long evaluation process by many of them and we are pleased that so many of South Africa’s largest asset managers have chosen this route,” says Martijn van Maanen, a partner at BarentsKrans.

Meanwhile, the case presents jurisdictional complexities given Steinhoff’s cross-listings. Jan-Willem de Jong, senior associate at BarentsKrans says: “There are various angles to the case which is indeed more complex than other cases. On the other hand, Steinhoff is a Dutch company registered in the Netherlands and there is a clear anchor to bring the case to the Netherlands. The Dutch courts are used to situations where they have to deal with foreign law.”

For instance, Dutch courts had to make damages rulings on cartel cases where Scania was fined €880 million for its participation in the 1997-2011 truck cartel. The case holds legal precedence as it was the District Court of Amsterdam which published a landmark decision endorsing the assignment model of litigation whereby victims of cartels from all over Europe pooled their claims in a single legal case in order to obtain damages for the ‘overcharge’ that they paid as a result of a cartel. “We are experienced in dealing with international cases and the Dutch courts are as well,” adds De Jong.

Earlier reports indicated that the Dutch law firm’s legal proceedings were not limited to Steinhoff but included the auditor at the time, Deloitte, on grounds of failing to report accounting irregularities. “It is more likely going to be broader than Steinhoff itself. It is also going to involve culpable directors and certainly we are also looking into the position of Deloitte as being the auditor for the Dutch company and in the past, also the South African one, ” De Jong adds.

Martin Hyde, director for Claims Funding in Europe has reiterated the position that Steinhoff shareholders were misled on the accurate financial position of the company and vital information was withheld from the market.

Earlier this week, a Dutch court dismissed claims by Steinhoff that a German court case started earlier in 2018 should take precedence over the Dutch case. The class-action suit was brought forward by Dutch shareholders association VEB in February 2018.

Source: moneyweb.co.za