Steinhoff subsidiary scraps preference share dividend

A Steinhoff International subsidiary said on Monday it would not issue a dividend on its preference shares due to the crisis at the South African multinational retailer which was prompted by the discovery of accounting irregularities.

The owner of more than 40 retail brands including Conforama, Mattress Firm and Poundland has been fighting for its survival since December last year and was last week hit by a $5 billion (3.6 billion pound) lawsuit from its former chairman Christo Wiese.

In March, the Johannesburg Stock Exchange suspended trading in Steinhoff Investment Holdings' preference shares due to its failure to submit requisite financial statements.

Steinhoff Investment Holdings is a wholly owned subsidiary of Steinhoff International and is the issuer of preference shares with a face value of 1.5 billion rand (88 million pounds).

"The board of directors of the issuer has determined that it is not in the best interest of the issuer to declare the preference dividend at this time, given the on-going situation faced by the Steinhoff group, following the announcements made since December 2017," Steinhoff Investment said in a statement.

Holders of the preference shares will instead be given notices of general meetings of Steinhoff Investment and entitled to vote at such meetings, it added.

For the period January 2017 to 30 June 2017, the board declared a gross dividend of 429.56 cents per preference share in August.