Auditor Deloitte and 128 other parties have applied to intervene in the Steinhoff liquidation matter that threatens its survival, further delaying the legal case that is yet to get off the ground.

Deloitte was the auditor for the global retailer when its share price collapsed in December 2017 as a large hole in the Steinhoff accounts was discovered, reports Business Day.

As Steinhoff’s auditor for years, Deloitte has faced lawsuits by investors who lost money and says it has an interest in getting involved in the liquidation matter.

Steinhoff has faced more than 100 lawsuits topping R136bn by claimants who argue they were duped into buying worthless shares. It has spent years trying to work out a settlement to end the litigation, which would benefit Deloitte and reduce its legal risks, too.

Steinhoff’s R24bn settlement received overwhelming support from all four sets of claimants last week who had to vote to approve it.

These included its former biggest shareholder, Christo Wiese, and will soon go before Dutch and SA courts to ensure it is ‘just and equitable’.

But the settlement could be thwarted by a liquidation attempt by Bernard Mostert and Braam van Huyssteen in the Western Cape High Court.

They say their shoe business Tekkie Town was stolen from them when they sold it for R1.8bn in Steinhoff shares that were later deemed to be almost worthless.

Deloitte says it must be permitted to join the matter, arguing if the liquidation goes ahead it will create ‘tension for the settlement process at best or sabotage it at worst’.

Full Business Day report

The winding-up application was set down to be heard over two days this week starting yesterday.

But in the end, notes a Fin24 report, the court did not hear any evidence related to the state of Steinhoff's finances on day one. Instead, it dealt with matters relating to the interventions applications, as well a complex set of interrelated bids for postponement and applications for leave to appeal. 

Last week, in the first leg of the case, the court ruled that it had jurisdiction to hear the liquidation bid, even though Steinhoff's ultimate holding company is registered in the Netherlands.

While Tekkie Town's lawyers said they were ready to start arguing the merits of the main application, lawyers for Steinhoff said it was still too early to begin.

The court heard that three new parties had applied to intervene in the case.

Besides Deloitte, Hamilton – which represents large SA fund managers – and a group called Demior Recovery Services, which says it is acting on behalf of 127 applicants want to be heard.

Steinhoff, meanwhile, is seeking leave to appeal two previous rulings in the case.

It also wants the liquidation hearing to be postponed while a separate appeal to the SCA is heard.

To complicate matters further, notes Fin24, two other parties that had previously applied to intervene in the case but whose bids were dismissed want to bring applications for leave to appeal these rulings.

Advocate Deon Irish, for Tekkie Town, argued that the correct time for appeals to be heard was at the end of the main case when the insolvency ruling is made.

He also noted that judge had already dismissed a postponement application last week. Irish argued that an appeal to the SCA might delay matters by up to 10 months and ‘we must get this show on the road’.

But Advocate Arnold Subel, for Steinhoff, argued that the main case could not be heard given the number of applications for intervention, postponement and leave to appeal that had been lodged.

Steinhoff wants the matter to stand down until it has argued for leave to appeal before the SCA.

The retailer holds that Judge Hayley Slingers was wrong in law to rule that a South African court could hear the liquidation of an ‘external company’ headquartered overseas.

Slingers adjourned proceedings until 11:30 today.

Full Fin24 report