Shares in global retailer crash almost 70% after CEO resigns

Marcus Newton
December 7, 2017

Steinhoff SNHJ.J SNHG.DE said chief executive Markus Jooste, who oversaw its expansion to one of the world's largest household goods retailers over almost 20 years, had resigned and PwC would undertake an "independent investigation". 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.

Steinhoff International shares plummeted on Wednesday as its chief executive officer Markus Jooste resigned with immediate effect amid "accounting irregularities", while the release of the company's 2017 numbers has been postponed.

The company has asked PWC to conduct an independent investigation into the matter.

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".

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The company's chairman, Christo Wiese, will become executive chairman on an interim basis. "In addition, the Company will determine whether any prior years' financial statements will need to be restated", it said. Besides Australia and South Africa, it owns retail chains in the UK, Europe and the United States, as well as controlling other African retailing businesses. It has also advised its shareholders and other investors to "exercise caution when dealing in the securities of the group", but a panicked sell-off has already caused the business's market cap to more than halve. Steinhoff derives about 60% of its earnings in Europe and 34% in Africa.

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

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. Steinhoff has said that was a tax case relating to whether revenues were booked correctly, and taxable profit correctly declared.

The global furniture and clothing retailer reported irregularities in its accounts that prompted a probe but the nature of the irregularities remain unclear at this stage.

Other reports by MaliBehiribAe

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