Tekkie Town founder Braam van Huyssteen, who has filed an urgent application in the Western Cape High Court to have Steinhoff liquidated, says it should have been done three years ago.
"We were hoping sanity would prevail. That those left in charge of Steinhoff would come clean and not try to act for their own benefit, which they clearly seem to be doing," he says.
Van Huyssteen, 56, built Tekkie Town from a small surf shop he ran with his father in Mossel Bay into a highly profitable retail footwear and apparel business with 368 outlets around SA.
In 2016, the then Steinhoff CEO Markus Jooste persuaded him to sell 57% of the business to his global furniture retail company in exchange for Steinhoff shares worth R1.85bn at the time. Steinhoff paid R1.5bn in cash to private equity firm Actis for the remaining 43% which Van Huyssteen had sold to them for R700m in 2014.
"Thank God", he says.
His Steinhoff shares became worthless when Steinhoff was almost wiped out in December 2017 after it announced "financial irregularities" and Jooste resigned.
R1.85bn
The value of the Steinhoff shares that Tekkie Town founder Braam van Huyssteen received in exchange for 57% of his business in 2016
Since then, a new Steinhoff management team led by CEO Louis du Preez has been engaged in a seemingly interminable process to tailor a deal acceptable to 90,000 shareholders around the globe who were left high and dry, some considerably less so than others.
They've proposed a ?943m (R16.2bn) settlement which they're confident will be approved.
"Not over my dead body," says Van Huyssteen, whose liquidation application, if successful, would blow it out of the water, as he intends.
"We realised that what's been going on here is not a fair and equitable way of winding up proceedings," he says.
A handful of high-profile, celebrity investors led by former Steinhoff chair Christo Wiese will do relatively well out of the settlement which, unsurprisingly says Van Huyssteen, they support.
The rest, many of them now more or less destitute pensioners who'd invested their life savings with institutional investors like Allan Gray, Coronation and Old Mutual, will be lucky to get a 10% payout on their claims.
"They have unilaterally decided to make a separation between these so-called market participant claimants, which is Auntie Sara in De Aar who bought R20,000, and so-called contractual claimants, the likes of Wiese and GT Ferreira," says Van Huyssteen.
It is proposed that these claimants, who ended up with Steinhoff shares as a result of a contract with Steinhoff, will get payouts of between 18% and 29%, translating in the case of Wiese to R7.9bn and R421m in the case of Ferreira.
Van Huyssteen says if all claimants were treated equally then Wiese's payout would be R1bn and Ferreira's R29m.
He and his fellow Tekkie Town shareholders are also contractual claimants, who would get between 4.2% and 5.8% of their nearly R1.9bn claim under the proposed settlement.
The less-favoured claimants say the contractual claimants don't deserve special treatment because they had the opportunity to do their own due diligence before acquiring their shares, unlike ordinary shareholders.
So what kind of due diligence did Van Huyssteen do before agreeing to exchange his company for Steinhoff shares?
"What more must I do than follow Dr Wiese, who's got R60bn invested there? Who am I? He's been round the block how many times?"
It was "through an act of fraud", he says, that he signed away his retail footwear and apparel business to Steinhoff.
He says liquidating Steinhoff would bring to an end an overlong process that mostly benefits top Steinhoff managers who are earning obscenely high salaries, and the financial creditors who "opportunistically" bought Steinhoff's ?11bn debt from the original creditors, the banks, at a heavily discounted rate of around 20c in the rand when Steinhoff shares crashed.
What ’s been going
— Braam van Huyssteen
on here is not a fair
and equitable way
of winding up
proceedings
Tekkie Town founder
He points out that not only will these Steinhoff bondholders, who now effectively own the company, receive full payment but are also getting 10% interest a year on the full debt until that payment is made.
"They're the same people who agreed to the exorbitant salaries being paid to top management at Steinhoff. They're in cahoots, that is very clear."
They both have a vested interest in dragging out the so-called settlement process for as long as possible, he says.
Given the interest they're earning it is "not surprising" that the financial creditors have agreed to extend the deadline for winding up the process from December 2021 to December 2022 and if necessary December 2023.
A liquidation would bring this mutually beneficial arrangement to an end, he says.
Steinhoff says the liquidation application is an attempt to disrupt the proposed global settlement.
"Steinhoff is trying to force claimants to accept so-called settlement agreements that they are self-designing," retorts Van Huyssteen. "Designed between the financial creditors who basically own the business now and are calling the shots, and the current management of Steinhoff who are working for them. And for their own pockets.
"You must ask who's benefiting out of this lengthy process? Everybody but the claimants.
"The bondholders managed to do a deal with [Steinhoff CEO] Du Preez and [CFO] Theo de Klerk that they pay them 10% interest on the R200bn that Steinhoff owes them and eventually they're entitled to 100% repayment, while Du Preez and De Klerk are trying to get rid of the other claimants by forcing those designated as market participants to accept 10c in the rand."
He says he is deeply suspicious of Steinhoff's motives for refusing to release the full PwC report on the company's collapse.
"You have to ask, who benefits from keeping it under wraps? It suggests wheelings and dealings behind the scenes. We have to put a stop to whatever is going on asap.
"We must get a South African liquidator onto the scene, rather late than never, to make sure that all the assets are getting disposed of in the most responsible and effective way for the claimants.
"A section 417 inquiry, which can only be done under liquidation, will completely unveil what happened and who should be prosecuted," he says.
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