VEB, the Dutch association of retail investors, filed the claim last Friday in the Rotterdam District Court on behalf of members who lost out when the group, which owns Poundland among other stores, announced last December it had appointed PwC to investigate irregularities in its accounts.
Steinhoff shares immediately went into freefall and are currently trading at 129c (7.3p), down 98.7% from a high over the last 12 months of 7,111c (400.8p).
The accounting scandal has left the South African group, which is quoted on the Johannesburg and Frankfurt stock exchanges but incorporated in Amsterdam, fighting for survival. Earlier this week, its creditors agreed to support a £8bn debt restructuring plan.
The Dutch writ alleges that Deloitte “seriously failed” to fulfil its duties as statutory auditors by incorrectly providing a clean opinion on Steinhoff’s financial statements for 2016.
“Due to the misleading financial statements with Deloitte’s unqualified auditor’s report, Steinhoff investors have incurred losses in the amount of billions of euros,” it adds.
It goes on to accuse the firm of failing to apply the appropriate level of professional scepticism in monitoring work on Steinhoff's audits which was performed by other auditors.
VEB also questions the transfer of the audit from Deloitte South Africa to Deloitte’s Netherlands practice in 2016. And it asks whether “Deloitte had sufficient insight to be able to assess the valuation of Steinhoff’s property, acquired companies and related goodwill, among other items”.
Deloitte Africa’s chief executive Lwazi Bam confirmed that Deloitte in the Netherlands had received the VEB writ and is currently reviewing the document.
He added, “Deloitte Netherlands has indicated it will not provide any further comment.”
In February this year, another group of shareholders launched legal proceedings in the Netherlands against both Steinhoff and Deloitte as co-defendants.
In that case, the claim is being funded by Dublin-based Claims Funding Europe and led by BarentsKrans, a law firm which is expert in bringing class actions.
VEB, whose membership is open to foreign as well as Dutch investors, not only issues independent information and advice on investing but also takes out class actions on members’ behalf.
It is currently running three major collective actions: these relate to SNS Reaal, a Dutch banking and insurance institution which was nationalised in 2013 to avoid bankruptcy, Fortis, the Benelux financial services business that was broken up and sold off after collapsing in 2008, and international grocery chain Ahold, which was providing fraudulent reports about two US subsidiaries.
Deloitte, which audited Ahold, has been involved in related litigation since 2003. Although a US class action against it was dismissed in 2004, it has faced two more shareholder actions including the VEB’s which was lodged in 2012.