GEORGE NEWS - Justice Nathan Erasmus of the Western Cape High Court on Tuesday 20 August handed down reasons for his ruling in April by which he interdicted Steinhoff from dealing with its shares in its subsidiaries, Pepkor Holdings and Pepkor Speciality, in any way that would prevent the possible return of Tekkie Town to its former owners and founder, Braam van Huyssteen.

Erasmus said the high court wants to fast-track all the Steinhoff matters through the court system and he apologised for the delay in providing his reasons for his decision.

The former owners of Tekkie Town brought an urgent application in April to have Steinhoff interdicted so that Tekkie Town's position is preserved while their legal battle to get their business back is ongoing. Steinhoff's implosion rendered its shares worthless and it has started selling off some non-core assets to regain liquidity.

Outlining the reasons behind his decision, Judge Erasmus said, "In my view the applicants made out a proper case for both urgency and the harm they seek to prevent is apparent."

He said it was clear from their agreement with Steinhoff that the transaction in which Tekkie Town was sold, comprised an exchange of the entire shareholding together with the business operated by the former owners and associated assets for shares in Steinhoff that turned out to be fool's gold as a result of misrepresentations by Markus Jooste on behalf of Steinhoff.

With regard to Pepkor's objections that it is an independent entity and that it was not part of the original transaction between Steinhoff and the former Tekkie Town owners, the judge said these assertions lose sight of the nature of the mutual relationships in the Steinhoff Group. "That (the relationships), it seems, might also not be always what it portrayed to be at first sight."

He said the path of tranfer of Tekkie Town between the subsidiaries within the Steinhoff Group eventually into Pepkor Speciality and the time line had been "clearly plotted".

Some of the decisions were made the day before the transaction would take place and on the same day the flow would go from one subsidiary to another, "at either the same price and/or an inflated price, and there is still an issue of the missing millions on the first transfer".

He said over and above that, Pepkor had stated that the transfer of Tekkie Town was part of an "internal restructuring" within the group.

'Open to solution offered by Steinhoff'
Van Huyssteen, who attended the handing down of the reasons on Tuesday said, "We have always been focused on restoring our interest in the business and growing it in the way we always had - without debt and one store at a time. Over time it became evident to me that one of the reasons why Tekkie Town exists, is to give a career platform to South Africans. It does not exist to shelter a select group of Pepkor executives from their losses in Steinhoff or to assist Steinhoff in servicing foreign debt with South African effort. We want to ensure that we and our colleagues retain our right to grow this business and leave a positive legacy. In that regard we remain open to any solution offered by Steinhoff that will result in this outcome."

Pepkor adamant over Tekkie Town ownership
Responding to Judge Erasmus' reasons for his ruling, Pepkor maintained that it had bought Tekkie Town from Steinhoff for value in 2017 and that it was not party to the initial Steinhoff/Tekkie Town transaction at all. 

"The purchase of Tekkie Town by Pepkor was done with full consent and participation from the former owners, Braam van Huyssteen and Bernard Mostert, who were Tekkie Town directors at the time of the purchase. Steinhoff holds no legal position to sell Tekkie Town, and Pepkor has no intention of selling Tekkie Town. The PriceWaterHouseCoopers report confirmed that Pepkor had not been involved in any irregular or dubious transactions of any sorts.

"Despite Braam van Huyssteen crying foul over the transaction, he has publicly admitted remaining in contact with, and maintains a close friendship with, disgraced former Steinhoff CEO, Markus Jooste, the other party to the transaction."

Pepkor CEO Leon Lourens confirmed that Pepkor's application for leave to appeal the 26 April ruling will be heard on 13 September. "We remain committed to the growth of our business, and Tekkie Town forms part of this strategy."

Steinhoff's said it is in the process of studying the judge's reasons. It confirmed that it filed a notice of application for leave to appeal in May. "It is our understanding that the applications for leave to appeal from Pepkor and Steinhoff will be heard on the same day (13 September)," said the communications department.