Former chairman launches £3.4bn lawsuit against Poundland owner

The parent company of Poundland is being sued for £3.4bn (59bn rand) by its former chairman Christo Wiese.

Steinhoff was hit by a huge crisis in December, when it revealed accounting irregularities that led to a 90% fall in its share price and the departure of Wiese.

Steinhoff bought Poundland in 2016 for £610m after a prolonged takeover battle, and also owns UK retailers Harveys and Benson for Beds.  Poundland’s immediate owner Pepkor Europe secured a £180m loan facility that is independent of Steinhoff in the weeks after the scandal broke.

South African retail magnate Wiese is relying on two claims in his lawsuit, which was filed by Titan Group, a vehicle for some of his family assets.

The claims relate to Wiese’s sale to Steinhoff of his retail businness Pepkor in 2015, when part of the payment was made in Steinhoff shares. The second concerns money Wiese put into Steinhoff the following year that was used to pay debt and support the acquisition of Mattress Firm.

Steinhoff said it will “assess the claims and determine the appropriate course of action”.

In a statement Wiese said he was prepared to work with other shareholders to find a solution for the group.

He said: “Many of the other businesses in the Steinhoff group offer good prospects and I strongly believe every attempt possible should be made to restructure the group as expeditiously as possible.”