(Bloomberg) -- Steinhoff International Holdings NV moved to appoint insolvency expert Paul Copley to its supervisory board as the troubled global retailer seeks to strengthen management and add expertise following an accounting scandal.
A former partner at PwC, Copley worked as an administrator of Lehman Brothers, one of the highest-profile corporate collapses of the financial crisis of 2008. He's currently chief executive officer of Reykjavik, Iceland-based Kaupthing EHF, the restructured successor of Icelandic Bank that was also bailed out in the credit crunch.
Steinhoff shares have plunged more than 95 percent since the owner of Conforama in France and Mattress Firm in the U.S. reported a hole in its accounts in December, raising questions about its ability to survive as a going concern. The retailer bought some time last month when it won support from a majority of creditors to restructure 9.4 billion euros ($10.7 billion), but has plenty more to do to shore up its balance sheet.
Lawsuits Loom
The South African company is also facing a string of class-action suits and other legal claims. Christo Wiese, formerly the company's chairman and biggest shareholder, has sued for 59 billion rand ($4 billion). Parties related to Tekkie Town, a South African shoe retailer bought by Steinhoff in 2016, are seeking 120 million euros, and businessman GT Ferreira is suing for 100 million euros.
“If these legal claims have legitimacy, then Steinhoff is not solvent,” Graeme Korner, a money manager at Johannesburg-based Korner Perspective, said by phone Thursday. Adding skills in insolvency and business rescue will be helpful, he said.
Five new supervisory-board members were appointed at Steinhoff's annual general meeting in April, including Peter Wakkie, who was heavily involved in Dutch retailer Royal Ahold NV's restructuring and turnaround. Copley has been nominated to join the supervisory board and will act as an adviser until he is put up for approval at Steinhoff's next general meeting, the company said in a statement Wednesday.
PwC is investigating Steinhoff's finances and is expected to report back by the end of the year with a view to providing audited results.
To contact the reporters on this story: John Bowker in Johannesburg at jbowker2@bloomberg.net;Janice Kew in Johannesburg at jkew4@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Lauerman
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