Steinhoff will wait for an actual lawsuit before deciding the fate of two directors it shares with the fund manager who plans to sue it

Business Insider SA
Steinhoff and Coronation directors Dr Hugo Nelson and Prof. Alexandra Watson (supplied)
  • Steinhoff says it has not received legal papers from Coronation Fund Managers and so can not determine if a conflict of interests exists for two of its board members.
  • Alexandra Watson and Hugo Nelson serve both on the Coronation and Steinhoff boards.
  • Coronation does not believe there is a conflict interest for Watson and Nelson.  

Steinhoff will consider a possible conflict of interest for two board members it shares with Coronation Fund Managers – the company likely to sue it over "accounting irregularities" – the multinational said.

“Please note that we are not aware of any decision by Coronation to take legal action against Steinhoff,” Steinhoff told Business Insider South Africa in response to questions.

“It is [therefore] premature to comment on any potential conflict of interest.” 

READ: Steinhoff at a record low as the JSE waits for German decision on its suspension

Alexandra Watson and Hugo Nelson were appointed to Coronation’s board in May 2008 and November 2016 respectively. 

Both were appointed to Steinhoff’s supervisory board at the company’s annual general meeting in April. Coronation is a substantial shareholder in Steinhoff. 

As non-executive directors, Watson and Nelson will unlikely play a direct role in the legal cases. But, the possibility exists that the directors use the confidential information they are privy to to benefit either Steinhoff or Coronation.

Coronation, however, does not believe a conflict interest exists with Watson and Nelson.  

“Their role is not to represent Coronation, but to fulfil that of an independent non-executive director as it pertains to Steinhoff, and for the benefit of all its shareholders,” the fund manager to Business Insider. 

“In the event that Steinhoff is discussed at Coronation board level, the said directors would recuse themselves from any such discussion as is in line with corporate best practice.” 

Coronation on Monday said it was will be taking legal action against Steinhoff for "accounting irregularities".

“We will be taking legal action against Steinhoff and, where legally possible, any other parties that have been complicit in any wrongdoing,” the company said.  

It joins prominent banker GT Ferreira, Tekkie Town, Dutch investors association VEB and former Steinhoff chairperson Christo Wiese who are collectively suing Steinhoff for over R60 billion. 

Steinhoff is currently valued at an estimated R9.5 billion and has debt over €10.4 billion (R156 billion). It is audited and unaudited results for 2017 is still outstanding.

READ: Steinhoff’s latest shareholder note shows a company ‘heading towards liquidation’ says one analyst

Herenya Capital Advisors founder Petri Redelinghuys previously told Business Insider South Africa that the amount of lawsuits against the company reflects a company “heading toward liquidation”. 

“It is starting to look like [shareholders] believe the company will be broken up or liquidated,” Redelinghuys said.

Shareholders are typically last in line when companies pay debtors.

“These lawsuits from shareholders such as Christo Wiese, [GT] Ferreira, Tekkie Town, and this is all speculation, are a means to get ahead [in the line of debtors] when the company is liquidated.”