Lewis Group has dismissed allegations of wrongdoing relating to the practice of cancelling credit transactions in default and re-invoicing them as cash sales, saying this did not affect provisions for future bad debt. A Business Day report says in an interlocutory application that will be heard in the High Court tomorrow, Lewis has applied to have a request for detailed information on this practice denied.

David Woollam, a director of Summit Financial Partners who brought the request, said that Lewis had been understating its bad debt. This comes after current and former Lewis employees told Summit that the practice of cancelling non-performing credit transactions and restating them as cash sales was common.

In an affidavit, Lewis' Leon Mocke said that R1.7m in credit transactions across seven branches was cancelled during the February-March 2016 internal ‘write-off period’. These were restated as cash transactions to avoid writing them off as bad debt, Mocke said. Payments made in respect of these credit transactions were then reflected as settlements of the re-invoiced cash transactions, he added.

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