Steinhoff shareholders sue Deloitte for “serious” failures

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Steinhoff’s shareholders have sued its auditor Deloitte for damages for carrying out an unqualified audit before a multi-billion-pound black whole was found.

Dutch investment group VEB have brought a lawsuit against Deloitte, alleging it had “seriously failed in its statutory task as auditor”.

Earlier this year an accounting scandal at the South African retail giant, which owns UK retailers Poundland, Harveys and Bensons for Beds, saw £10 billion wiped off of its market value and nearly toppled the group entirely.

“It is very questionable whether Deloitte had sufficient insight to be able to judge, among other things, the valuation of Steinhoff’s property, acquired companies and goodwill,” VEB said.

“It is also unclear how the accountant was able to approve Steinhoff’s cash position, as shown in the annual accounts.”

This comes after Steinhoff’s former chairman Christo Wiese announced he was also suing the group, hoping to claim £3.5 billion from cancelling purchases of its shares in 2015 and 2016.

In December, while the scandal was breaking, Steinhoff hired PwC to carry out an independent investigation into its accounting irregularities, in which a €6 billion black whole was discovered.

This set off a chain of events, namely the sudden resignations of chief executive Markus Jooste, Weise and chief financial officer Ben la Grange, and a crash in Steinhoff’s share values.

The investigation is still underway and Steinhoff is pushing ahead with a €10 billion debt restructure in a last ditch attempt of recovery.

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