Tekkie Town’s one-time owners just lost another legal bout to Steinhoff in a R1.9 billion claim
- The Supreme Court of Appeal has overturned a high court order that had banned Steinhoff and Pepkor from selling, or even issuing shares in, the Tekkie Town chain.
- Tekkie Town's original owners had won that order while they fight to have the business returned to them, or at least until they can claim some R1.9 billion in damages.
- But they never actually proved fraud by former Steinhoff CEO Markus Jooste, the SCA says, and their claim that Steinhoff and Pepkor had faked internal sales of Pepkor was also not substantiated.
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The Supreme Court of Appeal (SCA) on Wednesday overturned an order that had locked up the Tekkie Town retail chain tight, by banning owners Pepkor, and the stricken Steinhoff, from doing anything that may resemble a sale or dilution of Tekkie Town.
The high court which had granted that order had erred, the SCA said, and no legal basis had been established for such a ban.
The one-time owners of Tekkie Town, led by its founder Braam van Huyssteen, have fought furiously to have the chain returned to them, or at least to be paid some R1.9 billion in compensation.
In 2016 they had sold to Steinhoff a successful business of some 230 stores, those erstwhile owners contend, for shares supposedly worth R3.3 billion. Then massive fraud emerged at Steinhoff – to what they described in one set of legal papers as a "catastrophic loss of value".
The high court had forbidden current owners Pepkor from "alienating, transferring, ceding, assigning, and/or otherwise encumbering its shareholding" while the case for restitution was being heard, while the Tekkie Town business itself was interdicted from allotting or issuing any shares in itself.
The Steinhoff group's controlling Dutch company, meanwhile, was told it may not deal in its shares of Pepkor "in any manner which would result in loss of control" of Pepkor.
That, the Van Huyssteen group had argued, would allow them to reclaim what they had lost.
But Pepkor argued that the Tekkie Town sold to it – in a complicated transaction involving it passing through three Steinhoff companies – no longer existed anyway. The 230 stores it had bought had grown to nearly 400 (and, as of early 2020, to more than that), while the business had been integrated into a business unit that also houses Shoe City and Dunns, among other brands.
The high court interdict had some significant legal problems, the SCA said, including that the Van Huyssteen group "produced no evidence to substantiate fraud" they claim was perpetrated by former Steinhoff CEO Markus Jooste.
The group had also wrongly argued that Steinhoff controlled the legally-separate Pepkor, the SCA said, and had not shown that Tekkie Town had ended up with Pepkor through "simulated transactions", rather than in a genuine series of transactions for value.
In June the SCA threw out, with costs, an appeal by Van Huyssteen and other former Tekkie Town executives against an order that they may not sell shoes in direct competition to their former business, after they had set up the Mr Tekkie chain.
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