Braam van Huyssteen – who sold Tekkie Town and was left with worthless Steinhoff shares after the retailer’s collapse – has rebuked the CEO of Pepkor for not disclosing the findings of an inquiry into a executive share ownership scheme that shielded directors from losses.

In what Business Day calls a scathing open letter to Leon Lourens, Van Huyssteen said the group’s chair, Jayendra Naidoo, ‘promised an inquiry through your attorneys. The outcome of this inquiry never saw the light of day.’

The scheme, incorporated in a company called BVI 1499 and which included over 70 Pepkor executives, benefited from a guarantee in 2018 amounting to R440m from Pepkor when the company undertook to cover any deficit incurred in a lending transaction.

The shares were used as collateral for loans that allowed the company to acquire more shares in Steinhoff.

A group of former shareholders of Tekkie Town, led by Van Huyssteen – who sold the business to Steinhoff for R3.25bn in August 2016 before Pepkor (previously called Steinhoff Africa Retail) existed – instituted legal action in 2018 to recover the business they sold to Steinhoff.

The shareholders believe they were duped into selling by former CEO Markus Jooste.

Naidoo says Van Huyssteen’s claims are simply not true.

‘Pepkor formed an independent subcommittee of the board to assess the validity of guarantees provided by Pepkor in respect of BVI.'

The Business Day report notes the services of an external law firm were used and the findings were communicated to the market on several occasions.

'Pepkor has provided for this exposure in its annual financial statement,’ said Naidoo.

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