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General SENS Submitter Company - Lewis Group Limited - Settlement re National Credit Regulator and Lewis Stores (Pty) Ltd - LEWI
Lewis Group Limited - Settlement re National Credit Regulator and Lewis Stores (Pty) Ltd - LEWI Lewis Group Limited Registration number 2004/009817/06 JSE Bond Code : LEWI ("Lewis") SETTLEMENT ORDER IN THE MATTER BETWEEN THE NATIONAL CREDIT REGULATOR AND LEWIS STORES (PTY) LTD IN RELATION TO LOSS OF EMPLOYMENT AND DISABILITY INSURANCE Shareholders are referred to the announcement released on SENS of 15 September 2016 regarding the judgment by the National Consumer Tribunal (NCT) in the matter between the National Credit Regulator ("NCR") and Lewis Stores (Pty) Ltd ("Lewis"), which the NCR initiated in 2015 in relation to the issues of offering loss of employment insurance by Lewis to pensioners or self-employed consumers and the offering of disability insurance by Lewis to pensioners amongst other matters as contained in the SENS announcement referred to above. Shareholders are advised that today, 2 May 2018, following discussions between Lewis and the NCR the parties reached agreement that they would seek an order by consent from the High Court setting aside and replacing the judgement of the NCT with an order from the High Court. At the request of the parties the High Court granted the following order: 1. The determination of the NCT is hereby set aside and replaced by the orders set out below: a. It is declared that by offering loss of employment insurance to consumers who are retired or self-employed, the Appellant ("Lewis") has contravened the provisions of section106(2)(b), as read with section 106(1) of the National Credit Act 34 of 2005 ("NCA"); b. Save insofar as is permitted by law, Lewis shall not offer or demand that any pensioner or self-employed consumer pay for loss of employment insurance; c. Lewis shall, within 30 calendar days of this order, pay an amount of R5 000 000. 00 (five million Rand) as a fine (in terms of section 151 of the NCA); d. Lewis shall engage an independent firm of auditors to review the methodology applied in the conduct of the audit carried out by PriceWaterhouseCoopers Inc ("PWC") dated 19 August 2015 ("the PWC audit") and will procure a second audit only if and to the extent that the independent review concludes that there were material irregularities in the methodology adopted by PWC; e. Lewis will complete the repayment of the premiums paid by the retired, and self-employed consumers in respect of Loss of Employment Insurance policies, in accordance with the recommendations and findings of the PWC audit or any subsequent audit as referred to in paragraph (d) above and will provide the Regulator with the detail of such repayments, including the names of consumers. 2. Lewis will, in respect of all future credit agreements concluded with pensioners take reasonable steps to establish that such pensioner has an insurable interest in respect of the cover provided under any policy offered by Lewis. 3. There shall be no order as to costs. With reference to paragraph 1(e) above, shareholders are advised that Lewis is in the final stages of completing the process of refunding the amount of R67.7 million to its pensioners and self-employed customers in respect of the cost of loss of employment insurance mistakenly sold to them together with interest accrued. There is approximately R4 million still to be refunded. As reported previously, the R67.7 million above has been fully provided for in prior years. The court order provides certainty in this long outstanding matter and will result in an additional R5 million charge. A copy of the court order can be requested from Ms Diane Rafferty by email on email@example.com. Cape Town 03 May 2018 Debt sponsor Absa Bank Limited (acting through its Corporate and Investment Bank division) Date: 03/05/2018 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.