Dutch investor backing for Steinhoff class action

The Dutch Investors Association (VEB) says it has been approached by many SA-registered Steinhoff shareholders interested in participating in its class action against Steinhoff. According to a Business Day report, news that the well-resourced VEB is prepared to fight for SA shareholders adds to the mounting woes facing the world’s second-largest furniture retailer. The European Investors’ Association is also participating in the legal action. Dutch law, which is important in this case because although Steinhoff’s primary listing is in Frankfurt, its head office is in Amsterdam, gives the VEB extensive powers to take legal action against a company and its directors. The power includes making the action accessible to Steinhoff shareholders across the globe. However, before legal action can be initiated, the VEB is required to attempt to negotiate a settlement with Steinhoff. To this end, it sent a letter to the company on 7 December, saying it held the company, its management board and its supervisory board responsible for the losses incurred by Steinhoff shareholders caused by the alleged fraud and misleading statements. It demanded a formal reply from Steinhoff by 22 December 2017. In its reply, Dutch counsel for Steinhoff said the deadline was unreasonable. It requested that the VEB postpone any further action until more information had been garnered by PwC’s investigation. Steinhoff’s counsel intimated more information might be available around mid-January.