World

Steinhoff rocked as accounting probe claims CEO

Steinhoff rocked as accounting probe claims CEO

Steinhoff International, Europe's second-largest furniture retailer by sales said it had launched an investigation into accounting irregularities and that its chief executive had resigned on Tuesday.

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

The JSE says it's been talking to Steinhoff to find out the exact allegations against the global company after the furniture retailer shares plummeted. Attempts to contact Jooste were not immediately successful. He and Jooste, 56, both own properties in the scenic wine country around Cape Town, alongside other notable South African businessmen including Whitey Basson, who ran retailer Shoprite Holdings for 37 years until earlier this year.

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.

Stories of the "accounting irregularities" surfaced first in 2015 and then again in August of this year in a German magazine that German authorities were investigating a claimed fraud.

The turmoil has implications for Steinhoff Africa Retail, which was spun off from its parent in September, and Shoprite, in which Wiese is also the biggest shareholder.

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Steinhoff nearly merged with Shoprite earlier this year which would have formed Africa's largest retailer but the plans were scrapped in February.

KAP Industrial Holdings, in which Steinhoff is a major shareholder, fell the most in six months even as the firm said in a statement it is independently managed.

The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared. Jooste had been due to release the unaudited 2017 figures later today.

Steinhoff had denied the allegations when they surfaced again in August.

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.


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