Steinhoff subsidiaries sue Jooste associate in UK

Two subsidiaries of Steinhoff are suing British businessman Malcolm King for over R1.5bn in fraud damages, accusing him and his son Nicholas of conspiring with former Steinhoff CEO Markus Jooste to defraud the retailer, says a Fin24 report. The lawsuit describes Malcolm King, who has been linked to Lanzerac wine estate outside Stellenbosch, as a ‘long-time business and personal associate’ of the Steinhoff CEO, who abruptly resigned in December of 2017 when the first signs of an accounting scandal came to light. In a suit lodged in the High Court of England and Wales, the Steinhoff subsidiaries argue they have plentiful e-mail evidence showing how Jooste, King and others conspired to fraudulently spirit money out of Steinhoff to companies ultimately controlled by King. There were, according to the complaint, ‘no valid legal bases for these payments’. The suit is being brought against the Kings and their company Formal Holdings, which is registered in the British Virgin Islands, by Steinhoff subsidiaries Steenbok Newco 10 SARL, registered in Luxembourg, and Jersey-based Ibex Retail Investments. They are demanding restitution from the Kings and Formal Holdings of €92.8 (R1.6bn) plus £3m (R61m). ‘It is claimed in these currencies because those are the currencies that were fraudulently misappropriated,’ the complainants state. Jooste, who is not listed as a respondent, has previously denied any wrongdoing related to his tenure as Steinhoff CEO.

It is also claimed in the lawsuit that Jooste owns part of the Lanzerac wine estate via a byzantine ownership structure stretching to a company registered in the tax haven of the British Virgin Islands. The wine estate's complicated ownership structure, according to the suit, includes a number of companies registered in tax havens, companies with confusingly similar names, and companies that have undergone name changes. But, notes a second Fin24 report, according to Steenbok and Ibex, the chain of ownership eventually points, at least in part, to Jooste. ‘As before, my instructions are that Mr Jooste has no comment,’ his lawyer said.