Steinhoff shareholders had little choice but to vote to dissolve the shell of the scandal-hit global retailer on Wednesday, drawing a line under a nearly six-year saga that turned into a windfall for lawyers and advisers.
Those who have held stock via listings in Frankfurt or Johannesburg stand to gain little after the creditors who control the company get paid. $495 million
But outside parties have received R8.7 billion ($495 million) since late 2017, according to annual reports, and managers have also continued to be remunerated.
Steinhoff, the former owner of Conforama in France and Mattress Firm in the US, has been battling to survive ever since auditors refused to sign off on the company’s financials, prompting the resignation of former CEO Markus Jooste and a dramatic share-price collapse.
Investigations have since revealed numerous iterations of accounting fraud, and an arrest warrant has been issued against Jooste by a German court.
“It’s an absolute disgrace,” said David Shapiro, deputy chairman of Sasfin Securities in Johannesburg. “Anyone could have seen this company was never going to survive, and it would have been better for shareholders if it had been dissolved in late 2017.”
While Steinhoff has sought to stay afloat by selling some of its prize assets and shares in its subsidiaries, its borrowings kept growing larger.
After facing the reality that it would never be able to pay off its €10.2 billion debt burden, it changed tack to seek out a deal with financial creditors to forestall a messy liquidation. In June, a Dutch court confirmed Steinhoff’s plan to delist.
“The opportunities for grandeur are boundless when you are using shareholder’s money,” Shapiro said.