Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

Jerome Frank
Декабря 7, 2017

Steinhoff moved its primary stock market listing from South Africa to Frankfurt in 2015. In November of that year, German authorities searched Steinhoff offices in the town of Westerstede and visited private homes as part of an investigation by prosecutors in the German town of Oldenburg (near where Steinhoff's European HQ is based) into four current and former managers.

Chairperson of Steinhoff Holdings International, Christo Wiese will step in as interim CEO after Jooste's resignation.

Shares in Steinhoff, which is listed in the Netherlands, plummeted nearly 60 per cent in early trading.

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.

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

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

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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.

Jooste was at the helm of the company for almost 20 years and oversaw its expansion to one of the world's largest household goods retailers.

Wiese borrowed €1.6 billion ($1.9 billion) to buy additional Steinhoff shares through a family trust in September 2016, pledging €3.2 billion of his existing holding as security to the investment banks that lent the money.

The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared.

The CEO of recently unbundled Steinhoff African Retail (Star), Ben la Grange, has also resigned with immediate effect but will remain as a nonexecutive director on Star's board. The company has transformed itself in the past four years from a mostly African-focused retailer to an acquisitive powerhouse that now owns Mattress Firm in the USA and Poundland in the UK.

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