Payments to Steinhoff claimants begin

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FIFI PETERS: Today was supposed to be payday for some aggrieved Steinhoff shareholders who lost money – some a lot of money – when the company stock price tumbled 95% when the accounting fraud was uncovered back in 2017. The company said earlier this week that around 43 000 claim applications had been received to the value of around €3.2 billion [around R66.3 billion at the current exchange rate], and it did say that it would start paying out ballot claims today.

We’ve got Tahir Maepa, the supervisory board member at the Stichting Steinhoff Recovery Foundation, for some of the details. Tahir, thanks so much for your time, sir. Did payments go ahead today as was announced?

TAHIR MAEPA: Thank you very much for having me, Fifi. The process of the payments obviously is going to take a while because of the distribution margin of the different settlements. It’s [somewhat large] and quite intense.

For instance, we [finalised] our settlement already around May last year, and the payments only came about now because Steinhoff had to raise capital to be able to pay out those settlements. The announcement was made in terms of those settlements. The first need to be coming out from today, but I haven’t seen the schedules in terms of who has been paid so far. It’s still early for us to know exactly how it’s going to get rolled out, but it’s definitely happening.

FIFI PETERS: Okay. When you say ‘we’ are you talking of the PSA [Public Servants Association]?

TAHIR MAEPA: No, no. It’s a global settlement for a number of retailers. As a board member [of the Steinhoff International Compensation Claims Foundation] I sort of represent a number of retailers who were part of our class action. I’m not sure about the PIC [Public Investment Corporation], for instance. They never joined our class action. They joined other groups, so I’m not sure how much they managed to salvage. But as far as our settlement range for our clients who were part of our class action, we managed to get a range of about 91.7% of the shares that we had within Steinhoff.

FIFI PETERS: And are you able to tell us what that means in money terms?

TAHIR MAEPA: Well, in money terms – I don’t have the numbers with me – the last number that I saw was over €245 million that we had. Obviously that was at the earliest stages of the negotiations, before the final settlement was made. What I can tell you is the verified [number of] shares that we got were over 201 million shares, which meant 1% of the losses that we basically had after the accounting fraud scandal.

FIFI PETERS: As a member of the supervisory board, can you tell us what was meant by ‘valid and eligible’ claims? I see that a number of people filed applications for claims – 43 000 according to the statement – but the foundation has communicated that it would only be paying eligible and valid claims. So what are the eligibility criteria?

TAHIR MAEPA: The criteria were based on what was presented by different groups. Our group had to prove the shares that our clients had, and they had to be verified. And then the court had to issue certifications that these were valid.

Each claim had to be looked at separately in terms of whether it was valid and justifiable. So record-keeping by the different companies that had bought shares and all of that would have played a role in terms of this.

[Our] being an international group helped us a lot, because we had the capacity and the know-how and all the necessary professionals who were able to calculate and prove those share certificates and validate them, and all that. So for us it was smooth sailing.

But obviously the smaller guys – there are a lot of other people who really are going to get a knock from this because they didn’t join the bigger group which has the capacity and the money to do those sophisticated calculations as to what claimants are entitled to.

FIFI PETERS: So, as you said, the process has begun in terms of settling the claims, but you’ve indicated that it might be a long one. I don’t know if that’s an accurate interpretation of what you’ve said. I suppose the question then would be how long you expect the claims process to take, and when you see things being wrapped up.

TAHIR MAEPA: For now it’s supposed to be a little quicker in the sense that all the verifications have been made.

The issue of the payment now depends on what Steinhoff have in their kitty. They had to sell some of their shares in order to raise the R74 billion that will be used to settle some of the claims.

So it’s all about financial capability more than anything. Obviously the bigger guys are going to be settled first, and then the smaller guys may have to wait until they [Steinhoff] are able to raise the funding in terms of selling some of their assets to make sure that they have the liquidity to settle those claims. So it’s all about money, I think.

FIFI PETERS: Tahir, thanks so much for giving us your time this evening. Two updates on the story of great national interest – some developments happening, but apparently it is still going to be a long while before the story is actually over.

Tahir Maepa is supervisory board member at the Stichting Steinhoff Foundation.