Steinhoff CEO quits over accounting irregularities


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.

The chief executive's resignation will take effect immediately showing how serious it is. The release of Steinhoff's 2017 results was postponed until the probe is over.

Former manufacturing arm of Steinhoff Industrial, KAP's share price fell 14% to R7.45.

The group holds 6,500 retail outlets and 40 brands worldwide, including Bensons for Beds and Harveys in the UK.

And why is this important in Australia?

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. Mattress Firm has more than 3,500 stores in 48 states. The stock closed at €5.075 on its first day of trading in the German city in December 2015, when the company moved its primary listing from Johannesburg.

Steinhoff global CEO Markus Jooste stepped down on Tuesday with German prosecutors saying a number of officials are now under investigation.

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

"I doubt Steinhoff will collapse", Owen Nkomo, CEO of Johannesburg-based money manager Inkunzi Wealth Group, said by phone. The claims were that the company inflated revenues.

The company announced that new information had emerged which required investigation into accounting irregularities, and said it was unable to publish its financial results as a result. It warned it might have to restate financial statements from prior years.

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

Its statement said: "The Supervisory Board of Steinhoff wishes to advise shareholders that new information has come to light today which relates to accounting irregularities requiring further investigation". Steinhoff said Wiese would "embark on a detailed review of all aspects of the company's business with a view to maximising shareholder value".