Economy

Steinhoff shares plunge 60% as Jooste quits over alleged accounting irregularities

Steinhoff shares plunge 60% as Jooste quits over alleged accounting irregularities

Steinhoff SNHJ.J SNHG.DE said chief executive Markus Jooste, who oversaw its expansion to one of the world's largest household goods retailers over almost 20 years, had resigned and PwC would undertake an "independent investigation".

Steinhoff doubled down on Africa when it bought discount clothing retailer Pepkor in 2015 for about $5.7 billion at the time.

"The supervisory board, in consultation with the statutory auditors of the company, has approached PwC to perform an independent investigation".

Steinhoff International shares plummeted on Wednesday as its chief executive officer Markus Jooste resigned with immediate effect amid "accounting irregularities", while the release of the company's 2017 numbers has been postponed. The company had been expected to release its results for the year ended September 30 on Wednesday, but said it would now publish results when it was in a position to do so.

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.

Steinhoff's biggest shareholder and chairman, the billionaire Christo Wiese, has taken over as executive chairman temporarily.

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The investigation could result in prior years' financial statements needing to be adjusted.

Steinhoff also said that it was advising its shareholders and other investors to exercise caution when dealing in the securities of the company.

Steinhoff said it will update the market as the investigation proceeds and added that it will publish its audited 2017 consolidated financial statements "when it is in a position to do so".

The group's brands include Bensons for Beds and Harveys in the UK, Conforama in Europe, Pep and Ackermans in South Africa and Snooze in Australia.

While the nature of its accounting investigation was not disclosed, it had already been known that it was facing a tax probe in Germany.

It is not clear if these are the accounting irregularities Steinhoff is referring to in its latest statement.


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