Court blow for Steinhoff shareholders
A recent court ruling has closed a door for disgruntled Steinhoff shareholders.
“If politicians want shareholders to be able to hold directors to account they will have to change the law,” said one legal expert in response to last week’s decision by the South Gauteng High Court in a Steinhoff-related matter.
The court’s decision prevents a Steinhoff shareholder from launching a class action intended to get compensation for the losses suffered by thousands of individual investors as a result of the R185 billion collapse in the value of the group’s shares in late 2017 and early 2018.
The decision means that the first shareholder class action to apply for certification before a South African court has come to an abrupt, and possibly permanent, end.
The court’s ruling is being hailed as a victory by the 42 respondents – including Steinhoff, its directors, auditors and financial advisors – but is likely to incur the wrath of parliamentarians who have been tracking Steinhoff-related developments since early 2018.
Widespread impact
In an unprecedented move, reflecting the widespread impact of the collapse in the Steinhoff share price, representatives from the company as well as a number of regulators were called before Parliament in January 2018 to explain the events behind the collapse. The same parties have been called back to provide updates on a regular basis to parliamentarians, who have exhibited increasing signs of frustration at the apparent lack of accountability at the senior corporate level.
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