Steinhoff Insurers Agree to Pay $93 Million for Legal Claims
(Bloomberg) -- Most of the insurers that provided Steinhoff International Holdings NV with director-liability policies have agreed to pay as much as 78.1 million euros ($93 million) toward legal settlements resulting from a 2017 accounting crisis.
The bulk of the money will be offered to shareholders that bought stock on the open market in exchange for certain waivers and releases, the South African retailer said in a statement Tuesday.
Steinhoff is pressing hard to reach a deal with claimants such as former Chairman Christo Wiese and to settle various class-action lawsuits that resulted from the collapse in its share price. Chief Financial Officer Theodore de Klerk said earlier this month that he believes it’s “more likely than not” that the a global settlement following the alleged 6.5-billion euro fraud at the retailer will be successful and those with claims may get payouts late this year or in early 2022.
The agreement with the insurers includes cover for Wiese, former chairwoman Heather Sonn and founder Bruno Steinhoff. To avoid any doubt, it doesn’t include former Chief Executive Officer Markus Jooste, who a person familiar with the matter said this month is among those charged in Germany for accounting crimes.
The policy payouts also exclude ex-CFO Ben la Grange, former company secretary Stehan Grobler or former Steinhoff Europe director Siegmar Schmidt.
Companies buy directors and officers liability insurance to protect senior staff from personal losses if they are sued as a result of work done as employees. It can also cover the legal fees and other costs the organization may incur as a result of such a suit.
The move follows a similar agreement last month with Deloitte LLP, the auditors at the time of the scandal. The accounting firm supports Steinhoff’s push for a global settlement with out-of-pocket investors, offering an amount rising to 77.9 million euros from 70 million euros previously announced.
The stock climbed 9.7% at 3:45 p.m. in Frankfurt, where Steinhoff has its primary listing. It climbed 24% on Feb. 15, when the deal with Deloitte was first announced.
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