News Worms
News Worms


Steinhoff shares sink as CEO Jooske leaves amid 'accounting irregularities'

Steinhoff shares sink as CEO Jooske leaves amid 'accounting irregularities'

Supervisory board Chairman Christo Wiese will step in as executive chairman on an interim basis.

After initially falling 60 per cent to a seven year low, the shares in Steinhoff, which owns 40 local brands in more than 30 countries, later recovered but were still down 52%. That deal alone has cost the chairperson R87.7m ($6.4m).

The company's Supervisory Board, in consultation with the statutory auditors of the Company, has approached PWC to perform an independent investigation on the matter, while Markus Jooste, CEO of Steinhoff, has resigned from the company.

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

PSG Financial Services advised shareholders on Wednesday that its board of directors received and accepted the resignation of Jooste as a non-executive director of PSG Group and PSG Financial Services, with immediate effect. Attempts to contact Jooste were not immediately successful. Wiese had a net worth of $4.3bn as of Tuesday, according to the Bloomberg Billionaires Index.

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

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 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 U.S. and Poundland in the UK. "I would much rather take a chance and buy Steinhoff than Bitcoin".

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

Prosecutors have said they're looking into contracts valued in triple-digit millions of euros that appeared to have been conducted with third parties, but may have actually involved different units within the company. The release of Steinhoff's 2017 results was postponed until the probe is over.

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