Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

Trevor Jackson
December 7, 2017

After initially falling 60 per cent to a seven year low, the shares in Steinhoff, which owns 40 local brands in more than 30 countries, later recovered but were still down 52%. Steinhoff International's long-standing chief executive has resigned.

"We're going to have to look very, very carefully and what comes out of the investigation and obviously, we are very keen to get information into the market as soon as possible".

South African billionaire and chairman of the company, Christo Wiese, will run the company on a temporary basis.

The company has asked PWC to conduct an independent investigation into the matter. Steinhoff Africa slumped as much as 29% in Johannesburg, while Shoprite plunged as much as 6.3%, the biggest fall in nearly a year.

But in its announcement on Tuesday, it said: "The Supervisory Board wishes to reassure shareholders that Steinhoff has a number of high quality profitable businesses around the world".

Steinhoff previously rebuffed claims made in a report by German magazine, Manager-Magazin, of its former CEO, Markus Joost being amongst employees investigated by German prosecutors in a 2015 accounting fraud case.

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Steinhoff said in a statement that it would publish its audited 2017 consolidated financial statements when it is in a position to do so.

Kepler Cheuvreux said the pending tax and accounting investigations "could show severe irregularities".

The group's share price has fallen 18.2% from Friday's closing price of R55.81 to R45.65 on Tuesday after warning shareholders on Monday its results would not be signed by its auditors. According to the news agency Reuters, investors are now concerned that Wiese may be forced to sell shares he bought previous year with borrowed money, which would depress Steinhoff's stock further.

Wiese, 76, and Jooste didn't immediately respond to calls to their mobile phones.

"He will be replaced by his alternate director, Mr Theodore de Klerk, who has been appointed as a non-executive director to the boards of PSG Group and PSG Financial Services with immediate effect", it said.

Other reports by TheDailyFarc

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