Steinhoff shares plunge 66% as CEO quits amid accounting scandal

Alicia Cross
December 7, 2017

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".

The company has asked PWC to conduct an independent investigation into the matter.

For months now, the management of South Africa-based (but German listed) retailer Steinhoff have rejected stories of accounting problems, but Tuesday evening it surprised by revealing that chief executive, Markus Jooste, was resigning, and that new information had surfaced regarding the previously mentioned "accounting irregularities requiring further investigation".

Steinhoff's chairman, retail tycoon Christo Wiese, alongside former Pepkor CEO Pieter Erasmus, will run Steinhoff until a new CEO is appointed, a statement issued at 10.45pm on Tuesday night said.

The company also dropped a January 31, 2018 deadline for publishing its audited 2017 consolidated financial statements, saying it would only do so "when it is in a position to do so". It warned it might have to restate financial statements from prior years.

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

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The company stressed that it still had profitable businesses in its portfolio and urged investors to "exercise caution" when trading its shares in the wake of the disclosures.

It bought Poundland previous year and has introduced its Pep&Co budget clothing brand into scores of stores.

South Africa-headquartered, Dutch-registered Steinhoff has also been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg, Germany since 2015.

Over near two decades Mr Jooste has overseen Steinhoff's expansion from a South African furniture manufacturer to one of the world's biggest household goods retailers. Omri Thomas of Abax Investments, the 15th largest investor in Steinhoff, said because there was no immediate prospect of any clarity on its results, it was hard to put a value on Steinhoff and this had prompted the severe share reaction.

It is not now clear what "accounting irregularities" the company is referring to in its statement.

Other reports by Free-Prsite

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