Steinhoff shares fall 61% on opening after CEO resigns amid 'irregularities'

Frederick Owens
December 7, 2017

Star's share price fell 29% to R17.55 on Wednesday morning following the announcement of Jooste's departure.

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.

"We're going to have to look very, very carefully and what comes out of the investigation and obviously, we are very keen to get information into the market as soon as possible".

Supervisory board chairman Christoffel Wiese will take over as executive chairman on an interim basis.

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

Jooste was at the helm of the company for almost 20 years and oversaw its expansion to one of the world's largest household goods retailers.

In a statement last night the company 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".

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Steinhoff is a global giant with annual sales of more than €18 billion (and well over €1 billion in Australia).

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". Steinhoff stock closed down 63 percent in Frankfurt, while its bonds also sold off sharply.

The group on Tuesday said that its results for the year to end-September would be released "when it is in a position to do so". "In addition, the Company will determine whether any prior years' financial statements will need to be restated", it said.

"He will be replaced by his alternate director, Mr Theodore de Klerk, who has been appointed as a non-executive director to the boards of PSG Group and PSG Financial Services with immediate effect", it said.

The Financial Times reported that South African audit watchdog Irba said it was watching the Steinhoff developments closely.

Deloitte is Steinhoff's current auditor.

But Deloitte declined to comment, citing client confidentiality obligations.

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