South African investors back Steinhoff class action lawsuit

South African investors including Allan Gray, Investec’s asset management arm and Old Mutual are backing litigation against crisis-hit Steinhoff in the Netherlands, they said on Friday.

The investors represented about 20 percent of the shareholding in Steinhoff when the South African retailer uncovered accounting irregularities last year that sent its share price tumbling, a statement from representatives of the investors said.

The case is being paid for by Claims Funding Europe, a litigation-funding company based in Ireland, and run by Dutch law firm BarentsKrans.

It is separate from a class action brought by the Dutch shareholder group VEB, whose lawsuit is aimed at compensating investors for the more than 14 billion euros ($16.23 billion) that has been wiped off Steinhoff’s market value since December last year.

“We believe the circumstances merit these attempts to recover the losses incurred by our clients,” Allan Gray, which had a shareholding of around 1.3 percent in Steinhoff before its market value plummeted, said in a statement.

“Participating in this legal route is, therefore, our preferred option.”

Steinhoff is also facing a 59 billion rand ($4.15 billion) claim from former chairman and top shareholder Christo Wiese.