Steinhoff accounting scandal sinks shares, CEO exits

Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

The Manager Magazin reported that Steinhoff's chief executive, Markus Jooste was among employees under investigation for what was called a fraud in the "three digit millions".

Its European operation expanded previous year to include United Kingdom discount retailer Poundland.

Shares in Steinhoff International plummeted by as much as 68% in Frankfurt after its CEO resigned and the company said it was investigating accounting irregularities.

It put Christo Wiese, its largest shareholder and chairman, in charge and later sought to give "additional comfort" to investors anxious about its ability to fund its existing operations, saying it had ‍identified measures that would give it around 2 billion euros ($2.4 billion) of additional liquidity.

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".

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. It warned it might have to restate financial statements from prior years.

"The Supervisory Board wishes to reassure shareholders that Steinhoff has a number of high quality profitable businesses around the world", the company said in a statement.

As well as furniture and homeware, it also sells products including clothing, footwear and consumer goods.

Jooste, who had been with Steinhoff since 1988, has previously been credited with growing the Steinhoff Holding's into Europe's second-largest player, through a series of acquisitions of home retail furniture chains.

"Steinhoff will update the market as the aforesaid investigation proceeds".

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.

It is unclear what accounting irregularities the company was referring to in its statement on Tuesday.

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