The Steinhoff Case: Lessons for Investors in Securities Class Actions

A Global Collapse That Shook Investors

In December 2017, the board of Steinhoff International Holdings NV, a large publicly listed retail group with major listings in South Africa and Germany, announced the resignation of its long-time CEO after the company’s auditors, Deloitte, identified widespread accounting irregularities and refused to sign off on Steinhoff’s financial statements.

Over the following months, $20 billion of Steinhoff’s market capitalization disappeared after an independent investigation by PWC concluded that the company had recorded $7.4 billion in fictitious transactions between 2009 and 2017. 

This decline in Steinhoff’s share price resulted in billions in investor losses, from large institutions to ordinary South Africans invested via their pension funds.

The investors’ only means of recovery was to pursue a claim against the company and other responsible parties. Multiple class actions were launched globally, including in South Africa, the Netherlands, and Germany. The eventual settlement process was long, complex, and cross-jurisdictional, taking years before payouts began.

The Settlement

Why the Case Was So Complex

The Administrative Burden

What the Steinhoff Case Revealed About Client Challenges

How WTax Can Help

Final Takeaway for Investors

The Settlement 

In September 2021, the District Court of Amsterdam approved the Dutch portion of the settlement, and in January 2022, the High Court of South Africa, Western Cape Division, approved the South African portion. This increased the total global settlement amount to €1.4 billion (U.S. $1.6 billion) for all shareholders, one of the largest settlements seen outside of the U.S. to date.

Why the Case Was So Complex

Parallel litigation took place in different jurisdictions because Steinhoff operated through multiple companies:

• Steinhoff International Holdings N.V. (Netherlands)
• Steinhoff International Holdings Proprietary Limited (South Africa)

Clients often struggled to understand the complex cross-border procedures and whether their claims should have been filed under the Dutch or South African proceedings, as well as which legal process would be used in each jurisdiction. For many, simply determining eligibility, what documentation was required and which deadlines applied was overwhelming.

Legal Standing Matters

It is essential for shareholders to recognize that the legal proceedings involving their claims were directly related to the entity in which they held significant shares:

• The South African proceeding under section 155 of the Companies Act, 2008, involved creditors and investors with claims against South African incorporated entities.
• The Dutch proceeding under Wet afwikkeling massaschade in collectieve actie (WAMCA) involved shareholders who purchased shares through European exchanges.

The reason for this distinction lies in the principle of legal standing when determining a court's jurisdiction, as sufficient ties are necessary to establish which jurisdiction should decide on the matter.

Another concern international clients faced was the uncertainty of whether a Dutch or South African court order would be recognized and enforced in their home jurisdiction (e.g., Germany, the UK, US). This raised questions about whether opting in was necessary, or whether they would be bound by either court order automatically; equally, whether missing a claim filing or misclassifying their claim could have resulted in losing their recovery rights.

In short, the complexity of multiple jurisdictions, confusing filing rules and unclear enforcement left many investors unsure of how to proceed.

Key risks for investors included:

• Not knowing if opting in was necessary
• Risk of being bound automatically by court orders
• Missing deadlines or misclassifying claims, potentially losing recovery rights

The Administrative Burden

Along with navigating jurisdictional complexity, investors had to manage numerous hurdles in proving their share ownership during the class period by providing extensive documentary proof from multiple custodian banks and other market stakeholders.

This was an extremely time-consuming and administratively burdensome process, given the stringent requirements per jurisdiction.

Practical obstacles included:

• Gathering transaction data
• Verifying holdings
• Understanding legal and procedural terminology

Outcome: Many investors questioned whether pursuing a claim was even worth the effort. A large number of otherwise eligible South African claimants never filed claims, either due to lack of awareness or because they found the process too difficult to manage.

Some missed out entirely because they lacked the necessary support to complete the administrative requirements.

Confusion Around Claimant Groups

The magnitude of the Steinhoff case also attracted multiple claimant groups and litigation funders, each offering different fee structures and strategies. This created confusion for investors when evaluating which funding model offered the best balance of cost, governance and recovery.

Even the most sophisticated institutional investors required dedicated support to navigate these competing interests.

What the Steinhoff Case Revealed About Client Challenges

The Steinhoff litigation highlighted what investors often face in securities class actions:

• Complexity & Confusion: Difficulty determining eligibility, documentation and deadlines
• Administrative Burden: Heavy time and data demands
• Overwhelming Legal Language: Dense terminology and procedures
• Missed Opportunities: Eligible claimants failing to participate
  
  

How WTax Can Help

As a global leader in class action recovery, WTax specializes in simplifying complex cross-border litigation for our clients.

With our extensive expertise and an established global partner network, WTax has the tools to ensure that clients are guided through the regulatory frameworks governing global class actions, thereby protecting entitlement rights while removing the administrative burden.

For clients, this means:

• End-to-End Claim Management: From eligibility checks to recovery, no money is left unclaimed
• Local + Global Expertise: Global settlement experience combined with sensitivity to South African investor needs
• Relief from Administrative Burden: We take on data collection, filings and case monitoring
• Maximized Recovery: Avoiding missed deadlines or misclassified claims
• Aligned Interests: Our no win, no fee model links our success to client success

WTax also acts as an independent, client-focused recovery agent, offering transparent guidance without hidden costs or conflicting interests.

Final Takeaway for Investors

The Steinhoff litigation underscores that investor recoveries in global securities cases depend not only on the legal merits of a case but also on the ability to manage jurisdictional complexity and administrative demands.

WTax continuously monitors regulatory, legal and settlement developments worldwide, keeping clients informed of evolving risks and opportunities. This allows proactive decision-making rather than reactive scrambling.

Without expert support, investors risk:

• Missing deadlines
• Submitting incomplete filings
• Achieving sub-optimal recovery

With WTax, a complex and stressful process becomes a clear, managed pathway to recovery.