Battle between former Tekkie Town execs and Steinhoff Africa Retail heats up

Shoe retailer Tekkie Town was bought by Steinhoff International in late 2016. It was later transferred to STAR, the JSE-listed company that contains Steinhoff's African retail assets.

For months there has been acrimony between some top executives at Tekkie Town and STAR, which culminated in senior Tekkie Town executives quitting on June 25.

Former Tekkie Town CEO Bernard Mostert, who was among those that resigned, said at the time it had become "impossible for us to achieve the desired results for the business" because of the way they had been treated.

On Friday STAR, in a stock exchange news announcement, said it had obtained an urgent interdict against four former members of the Tekkie Town management team to stop them from interfering with IT systems and "destabilising operations".

Mostert told Fin24 on Tuesday that he could not comment on the court order obtained by STAR on Friday against himself and a number of other respondents, because they were busy finalising their responding affidavits.

Steinhoff Speciality Fashion and Footwear obtained an interim interdict against Tekkie Town founder Braam van Huyssteen, Mostert, Willem Wait, Anton Roetz, Nunanda Property Investment, AJVH Holdings and Swartvlei Equestrian Estate.

The judge gave the respondents until 31 July 2018 to provide reasons why the order should not be made final.

In the meantime the respondents are interdicted from accessing or "interfering" with Tekkie Town's IT system, server or network or any Tekkie Town hardware, software or data in any manner.

The respondents are also interdicted from making use of any data, IP, "cloned" hard drives or the content of alleged cloned Tekkie Town staff email inboxes.

STAR also wants the matter to be referred to the National Prosecuting Authority for further investigation.

Tangled web

The Steinhoff Speciality Fashion and Footwear application that led to the interdict was based on a statement by Werner de Bruin, business intelligence developer at Tekkie Town and now working for STAR. De Bruin was initially one of the group of employees who resigned, but has since returned.

According to De Bruin, Van Huyssteen told him in a phone call in June that staff who resigned would have their salaries guaranteed and that "the fight" with STAR would be over soon. De Bruin said he felt the resignation was a test of the loyalty of Tekkie Town employees.

De Bruin alleges he was instructed by Roetz to buy hard drives and make backups of mainframe databases and all IP in Tekkie Town and to take these off-site. The backups were made and taken off-site. Hard drives bought with Mostert's credit card were used, according to De Bruin.

De Bruin was told that Leon Lourens of Pepkor was coming to "take over" the Tekkie Town head office and that was why backups needed to be made.

This "was not normal practice", according to De Bruin.

Negotiations between Mostert and STAR about a possible sale of Tekkie Town failed, according to De Bruin. Mostert and others allegedly offered STAR R2bn for Tekkie Town, while STAR wanted R3.8bn, according to De Bruin.

According to De Bruin, the respondents' aim was to be able to prevent the till operators in all 380 Tekkie Town stores nationwide from being able to do sales, resulting in "chaos".

When another attempt by Van Huyssteen to make a deal with STAR failed, De Bruin said he (Van Huyssteen) was "angry" and "there was speculation that he wanted to hurt the business as a result".

According to De Bruin, Wait told him that Van Huyssteen was going to make another offer to STAR. De Bruin said that gave him "hope that all would be resolved before they took any actual steps to sabotage the business".

When De Bruin was nevertheless told by Wait that Van Huyssteen had given the instructions for the Tekkie Town payment system to be sabotaged, he said he (De Bruin) felt like he was being "thrown under the bus".

The next day De Bruin phoned a number of people to "come clean" and has assisted Tekkie Town and STAR ever since.

In transcriptions of phone conversations submitted by De Bruin as part of the STAR application, he appears to be told by someone that "anarchism of the first degree" is sought and that no Tekkie Town branch should be able to make any sales.

In another phone conversation he is told that "another" Tekkie Town might be started.

"We are not going to make it easy for them (STAR), because they did not make it easy for us," De Bruin is told by someone by phone.

In another phone conversation De Bruin is cautioned that the system disruptions at Tekkie Town must be done very safely "because if it bites us it will bite us dead".

Another supporting affidavit to the STAR application is by Eben Bothma, IT executive in charge of infrastructure at STAR. He said he was sent to the Tekkie Town head office in George in the aftermath of the mass staff resignations on 26 June. His task was to secure the network.

He noticed an attempted log-in from an unidentified person using existing user accounts which had been available previously to certain Tekkie Town employees and had subsequently been disabled.

In a SENS statement on Friday, current Tekkie Town CEO Leon Lourens said, "[I]t is regrettable that we have had to take such legal action. We remain focused on the continued success of STAR and Tekkie Town with our determined and committed team and will focus on continued growth. Our ethics and values have never changed and never will. We will continue to use the necessary legal process available to protect our business".

Lourens said the interim management and support team, together with staff members who have remained in the business, continue to operate Tekkie Town in a stable manner. The supply chain is operational, all stores are trading, and performance is in line with targeted levels. The performance of all other STAR businesses remains unaffected.

Lourens said Tekkie Town continues to be an important part of STAR, operating more than 380 stores, and providing employment to more than 3 000 employees.

Return of equipment

At the beginning of July, the George Magistrate's Court ordered that computer equipment held by De Bruin be returned to its owner, Nunanda Property Investments, of which Van Huyssteen and Mostert are the directors. De Bruin was also ordered to pay the full costs of this application.

De Bruin has to show by July 17 why this order should not be made final.

Some of the equipment was returned to Nunanda by the Sheriff of George and the rest of the equipment was returned to Nunanda’s legal representatives by senior STAR executives on Thursday.

"We believe the seizure of this computer equipment was designed to disrupt the work of Nunanda, which serves several other companies, including AJVH, which is currently involved in several legal actions against Steinhoff Africa Retail," Mostert said in a statement.

"It is regrettable that this damaging disruption was caused to the business and more so that the staff of Nunanda was threatened and intimidated during this process."

-Fin24