Only two weeks ago we shared the news that Dealz could in serious trouble and since then things have gotten worse for the popular chain.
The owners of Deal, known as Poundland in the UK, Steinhoff International Holdings NV shares plunged as a meeting with bankers and investors turned into a lawsuit against the retailer in Germany.
A case against the South African homeware company was filed Tuesday, a TILP law firm said in a statement on Wednesday. Investors are seeking to recover undocumented funds after accounting irregularities were revealed two weeks ago.
The share value dropped by some 37% at the opening of trading today, before settling at a value of €0.33 - 27% lower than at the close of trading yesterday. According to The Irish Times, the case will be one of many taken by investors against the chain, angry at their losses.
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Innsworth Litigation Funding, a London-based unit of Paul Singer’s Elliott Management, is building a case against Steinhoff and is seeking shareholder clients willing to sue and their not the only ones. Deminor Recovery Services, a Brussels-based shareholder advisory group, has also invited institutional shareholders to register for a potential case.
Creditors withdrew support on Tuesdays meeting with Steinhoff, the owners of Dealz, and the magnitude of the accounting errors are still unknown. It was revealed at the meeting that the retailer had been filing accounts without detailed visibility of the cash flows from individual companies.
Steinhoff has hired PwC to investigate the accounts and has started to sell non-core assets to boost liquidity. Both Chief executive Markus Jooste and billionaire Chairman Christo Wiese have left quit during the aftermath of the scandal. The company operates more than 4,600 stores across 12 countries.
