An interdict has been granted by the high court against Tekkie Town’s current management in favour of the retail chain’s former owners and management, which prevents them from selling shares in Tekkie Town to raise funds to help the beleaguered Steinhoff.
Current owners Steinhoff International – formerly Steinhoff Africa Retail – suffered the blow in the Western Cape High Court in papers stamped over the weekend.
The ruling effectively means the company will not be able to trade its shares while the case remains in the balance. However, the stores will continue to operate.
Justice Erasmus ruled that Steinhoff International and the companies it controls, Pepkor and Tekkie Town, were interdicted and restrained from dealing in the shares. However, Pepkor has said they had no intention of selling the company anyway.
Pepkor commented following the ruling: “Today’s interim ruling has no impact on the day-to-day operations of Pepkor. Similarly it has absolutely no effect on the operations and stores of the Tekkie Town business. Pepkor has never had any intention of disposing of Tekkie Town and it still forms part of our growth strategy with more than 30 stores to open during this financial year. We shall continue to grow the business and to take decisions that are in the best interest of Pepkor. We are confident that the legal process to follow will validate the investment we have made in this business.”
The former owners of Tekkie Town, led by founder Braam van Huyssteen and Bernard Mostert, the former CEO of Tekkie Town, explained that they wanted their legal action to allow them to be restored as the rightful owners of Tekkie Town.
Mostert told Moneyweb this month they wanted to protect their right to reclaim their business and to prevent it being further sold off because Steinhoff, which was rocked by fraud on a massive scale, continues to unravel.
“So what we are seeking is protection to ensure that what we lost, through what the company has now admitted are fraudulent activities and very gross misrepresentations, can actually be restored to us,” he told Moneyweb.
Pepkor bought Tekkie Town for R3.3 billion in 2016 after exchanging the entire shareholding in Tekkie Town for restricted shares in Steinhoff.
But when Steinhoff collapsed and its share price imploded, the script the Tekkie Town vendors received became commercially worthless.
Erasmus delayed a ruling on costs.
Tekkie Town interdict by Charles Cilliers on Scribd
Mostert said it was also unacceptable that Pepkor had continually been trying to distance itself from Steinhoff, despite the fact that it was 71% owned by Steinhoff.
“Last year there were reports of an approach to buy it, or buy into the group. So for us it is a concern. Another exchange of the assets would cause further frustration in our journey of getting our business back. So this is really just an interim step to make sure that the Steinhoff delay and the delays that continue to happen don’t cause us to move further away from our goal [of reclaiming the business].”
This article was updated at 19.15pm to reflect Pepkor’s comment and the headline was adjusted in response.
(Edited by Charles Cilliers)
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