Monday, 11 December, 2017

Steinhoff says probes accounting irregularities, CEO resigns

Steinhoff tanks 57% as CEO leaves amid accounting probe Steinhoff shares sink as CEO Jooske leaves amid 'accounting irregularities'
Juana Turner | 07 December, 2017, 00:50

The group said in a stock exchange announcement: "Steinhoff will update the market as the aforesaid investigation proceeds".

It has revealed its veteran chief executive, Markus Jooste, "has tendered his resignation with immediate effect and the board has accepted the resignation".

The board has appointed Steinhoff's chairman, the South African retail billionaire Christo Wiese, as executive chairman on an interim basis following Mr Jooste's departure.

Steinhoff said Wiese would "embark on a detailed review of all aspects of the company's business with a view to maximising shareholder value", but its South African shares had slumped 61 percent to close at 15.87 rand, after hitting an eight-year low of 13.50 rand in earlier trading.

Peter Brooke, portfolio manager at Old Mutual Investment Group - a top 20 shareholder in Steinhoff - said the resignation was a "red flag" signaling "something very serious".

It said that it would publish the audited 2017 consolidated financial statements "when it is in a position to do so" and that it would also determine whether any prior years' financial statements would need to be restated.

For Steinhoff, the German probe has clouded what had until recently been seen as an acquisition-fueled push into some of the world's biggest retail markets.

Deloitte is Steinhoff's current auditor.

Steinhoff, which was already facing a criminal and tax investigation in Germany, said that it approached PwC about conducting an independent investigation into its accounting issues. The company has said that move related to whether revenues were booked properly, and whether taxable profit was correctly declared. It is unclear what accounting irregularities the company was referring to on Wednesday.

It is being reported Steinhoff did not tell investors about transactions amounting to almost $1 billion (R13,5-billion). A spokesman declined further comment.

Steinhoff is the owner of more than 40 brands in over 30 countries.

The JSE's director of issuer regulation John Burke told Reuters the bourse was in talks with Steinhoff to get answers on the investigation of possible accounting irregularities.

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