Steinhoff's insurers agree to pay $125 million

Steinhoff's insurers agree to pay $125 million | Insurance Business Asia

Steinhoff's insurers agree to pay $125 million

Following news that Steinhoff International Holdings NV was in talks with insurance providers about getting help settling legal claims resulting from a 2017 accounting crisis, the retail group has now reportedly reached an agreement with insurers to pay up to €78.1 million (around SG$124.8 million).

Steinhoff is a South African-German-Dutch international retail holding company that primarily focuses on the furniture and household goods markets, and operates in Europe, Africa, Asia, the United States, Australia, and New Zealand under brand names like Conforama, Mattress Firm, and Poundland.

Reuters has reported that the select insurance companies involved in the claims settlement specifically underwrote the retail group’s directors and officers insurance policy, which was triggered after an accounting fraud in December 2017 led to a massive share price fall for Steinhoff. The combined claims of those who have quantified their alleged damages top 136 billion rand.

As part of the agreement, the insurers will offer up to €55.5 million to market-purchase claimants “in exchange for certain waivers and releases,” reported Reuters.

The agreement with directors and officers excludes former CEO Markus Jooste, former CFO Ben La Grange, ex-secretary Stehan Grobler, and the group’s former Steinhoff Europe director Siegmar Schmidt, but it does impact some of Steinhoff’s past directors and officers, like founder Bruno Steinhoff and former chair Christo Wiese.

The agreement follows one made to the retailer’s former auditor Deloitte, which stated in February that it would support the plan and pay up to €77.94 million to settle some claims.

“Deloitte, the D&O insurers, and the settling D&Os do not in any way admit liability for the losses incurred by Steinhoff and its stakeholders as a result of the accounting irregularities at Steinhoff,” the company said, according to Reuters.