Steinhoff International faces US$4.75 billion lawsuit

The former chairman of South Africa’s scandal-ridden Steinhoff International has filed a US$4.75 billion lawsuit against his former employer, claiming damages associated with investments his entities made into the business in 2015-16.

Wiese’s company Titan Group is seeking compensation related to capital that it injected into Steinhoff in 2016 to enable it to acquire a US-based mattress retailer and pay down associated debt.

Titan Group has also issued a claim relating to a capital injection relating to Steinhoff’s acquisition of Pepkor in 2015, which was previously owned by Wiese and sold partly for shares in Steinhoff, the value of which has since tanked in the wake of its scandal.

Wiese, who resigned as chairman of Steinhoff in December in the wake of its developing accounting scandal, served the retail giant with summons in Europe on Thursday.

Steinhoff – which owns Fantastic Furniture, Freedom and Plush in Australia –  said it will assess the claims and determine the “appropriate course of action”.

The new suit comes less than a day after Steinhoff settled another claim with European furniture retailer Andreas Seifert over the ownership of Poco furniture group.

Steinhoff agreed sell its interest in Poco to Seifert in a deal valued at around €216 million (US$262 million).

“The company is pleased to announce that, at the hearing, the parties agreed, in principle, to settle the matter on acceptable terms. To this end, it was agreed that the group would no longer contest the validity of the forfeiture of the Seifert Entities’ existing 50 per cent interest in Poco,” the company said.

Steinhoff has spent the start of this year in a rush to raise capital to stabilise its operations after irregularities in its books emerged, sparking a scandal that has impacted the retail conglomerate’s operations around the world.

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