PwC investigates accounting irregularities at Steinhoff

PwC investigates accounting irregularities at Steinhoff

PwC investigates accounting irregularities at Steinhoff

Steinhoff said its chairman and largest shareholder Christo Wiese would take temporary charge while a successor to Jooste was found.

Steinhoff's stock was down by 68 percent in Frankfurt on Wednesday, while its latest bond sold in July fell by more than 40 points, after the company said late Tuesday that "new information has come to light today which relates to accounting irregularities requiring further investigation". That deal alone has cost the chairperson R87.7m ($6.4m).

The Wednesday plunge of shares in the firm, which owns Conforama in France, Poundland in Britain, Poco in Germany and Pep in southern Africa, followed news that chief executive Markus Jooste had resigned.

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.

Steinhoff bought the Willenhall-based chain of discount stores for £610 million previous year.

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

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Wiese is South Africa's fourth-richest person with a net worth of $4.3 billion, according to the Bloomberg Billionaires Index.

It is being reported Steinhoff did not tell investors about transactions amounting to almost $1 billion (R13,5-billion). Steinhoff Africa slumped as much as 29% in Johannesburg, while Shoprite plunged as much as 6.3%, the biggest fall in nearly a year.

Earlier this year, Steinhoff acquired a majority stake in mattress producer Sherwood Bedding, a family-owned company based in Fort Lauderdale, Fla.

"I doubt Steinhoff will collapse", Owen Nkomo, CEO of Johannesburg-based money manager Inkunzi Wealth Group, said by phone.

The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared. The release of Steinhoff's 2017 results was postponed until the probe is over.

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 notes were issued in July and have a Baa3 investment-grade rating from Moody's Investors Service.

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