Big Retail Group Offers Up $1.4 Billion To Settle Accounting Scandal After Off loading Harris Scarf
Steinhoff, the corrupt South African retail group who changed their name to Greenlit Brands in Australia and were responsible for the questionable sale of Harris Scarf, that saw consumer and appliance distributors owed millions is offering up A$1.4 Billion dollars to settle a multi-billion dollar accounting scandal.
In Australia Greenlite Brands is run by Michael Ford the former CEO of The Good Guys, he has not commented on the scandal or the questionable sale of Harris Scarf who was declared insolvent days after Greenlit Brands offloaded the business.
The company, whose stable of brands includes Freedom, Fantastic Furniture, Snooze, Plush and OMF and in the UK discount retailer Poundland and Mattress Firm in the US, said overnight that the offer was designed to resolve almost all “complex legal claims” against it as the group tries to repair its finances.
The Company that has lost half its value since it first revealed the accounting irregularities, including evidence that former executives inflated profits and assets by more than A$8bn for several years.
In Australia Ford who left behind a struggling The Good Guys operation has not commented on how much Greenlite Brands made by selling the mass retailer to Allegro brands another Company run by former South African executives who on getting the business stripped more than $70 million in cash reserves out of the Company and then flicked it on to the liquidators with suppliers to the retailer taking a multimillion dollar hit.
The scandal has left Steinhoff facing almost a hundred lawsuits seeking at least $10bn, including claims filed by Dutch and South African investors.
Christo Wiese, the retail magnate who became Steinhoff’s largest shareholder and was formerly the richest South African, has the largest claim with about A$4.9bn.
The proposed settlement “is the culmination of 12 months of intensive effort”, said Louis du Preez, Steinhoff’s chief executive.
“Although there is no certainty yet that we will be able to conclude this settlement, in our view these terms are firmly in the best interests of all stakeholders,” he said.
Steinhoff said the settlement was being offered in both cash and shares in Pepkor, its South African retail business.
The company said the size of the offer reflected both its heavy debts and damage inflicted on its operations by the pandemic.
If the company had to pay the whole value of legal claims it faces, “it is clear that the net asset value of the group would fall far short of the amount required to satisfy them in full” and liquidation would ensue, Steinhoff said.