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Steinhoff International Holdings N.V.

Case Details

Jurisdiction: South Africa / Netherlands

Case Summary

ISIN:
Ordinary Shares: NL0011375019
Preferred Shares: ZAE000068367

Relevant Period:
Shares bought or held through December 20, 2017 COB.

International collective litigation efforts have been initiated against Steinhoff International Holdings N.V.  (“Steinhoff,” or the “Company”), a registered Dutch corporation that maintains its “business office in South Africa, and is one of the largest sellers of furniture and household goods in the world, with more than 12,000 stores and local retail brands in more than thirty countries.   Steinhoff’s common shares trade on both the German (Frankfurt) and South African (Johannesburg) stock exchanges.

Since 2017, Steinhoff dubbed “Africa’s Ikea,” has been embroiled in a massive accounting scandal, “reminding many in South Africa of Enron.”  By November 2017, Reuters reported that Steinhoff failed to tell investors about $1 billion in transactions with a related company, despite laws that experts believed required disclosure.  On December 5, 2017 the Company announced the immediate resignation of its Chief Executive Officer and the discovery of significant “accounting irregularities requiring further investigation.”   The Company’s shares plummeted 80% over the course of two trading days.  As additional information regarding the accounting fraud came to light – including restated financial statements, additional resignations of Steinhoff’s most senior officers and directors, and various regulatory and criminal investigations which included allegations of insider trading  – the Company’s share price continued to plunge, wiping out billions in shareholder value.  Steinhoff’s auditor, Deloitte LLP (South Africa), is also being investigated by the Dutch Authority for the Financial Markets and South Africa’s Independent Regulatory Board of Auditors.  In January 2018, several major U.S. financial institutions reported hundreds of millions of dollars in losses and charge-offs tied to the Steinhoff accounting fraud, including Citigroup ($130 million), Goldman Sachs ($130 million), J.P. Morgan ($143 million), and Bank of America ($292 million).  Then, on April 28, 2018, Steinhoff leadership announced that a forensic investigation by PricewaterhouseCoopers LLP, “confirmed a pattern of transactions undertaken over a number of years across a variety of assets classes that led to the material overstatement of income and asset values of the group.”   On this news, the Company’s shares fell an additional 13%.  By late June 2018, Steinhoff announced that its total write-downs related to the scandal had ballooned to more than 10 billion euros (approximately $12 billion) – which was 70% higher than initially estimated.

Saxena White and Lieff Cabraser have established the Stiching Steinhoff Investor Losses (the “SSIL Foundation”), a Netherlands-based foundation with an exceptional Board of influential Dutch jurists, to actively protect the interests of investors who purchased and/or traded Steinhoff securities, and who suffered losses as a result of the fraudulent and misleading information in Steinhoff’s public filings and other unlawful acts perpetuated by Steinholff, its high-ranking officers, and other affiliated third parties.  The SSIL Foundation represents the interests of harmed investors of Steinhoff securities, including common shares, derivative instruments, bonds and/or other securities issued by Steinhoff, and provides a vehicle to litigate in the interests of Steinhoff investors and/or to pursue a binding, collective settlement that provides a global resolution of the fraud perpetuated by the Company, and its senior executives.