JOHANNESBURG — Global furniture and clothing retailer Steinhoff has made a shock announcement overnight, saying that its CEO Marcus Jooste has resigned with immediate effect. His departure follows a controversial report that appeared in German business magazine ‘Manager Magazin’ in August this year. Manager Magazin reported that German prosecutors suspected that inflated revenue was reported on the balance sheets of units owned by the retailer. The magazine further reported that in November 2015, German authorities searched Steinhoff offices and visited private homes as part of an investigation into four current and former managers. Markus Jooste is among employees being investigated by German prosecutors, according to the magazine. The allegations, to date, have been untested, but the market is set to react vehemently to this latest development regarding Jooste. – Gareth van Zyl
The owner of the France-based Conforama furniture store chain and Pep clothing stores in Africa has appointed auditor PwC to probe the matter, it said in a statement on Tuesday. South African billionaire and chairman of the company, Christo Wiese, will run the company on a temporary basis.
The retailer, which has origins in South Africa, has a base in Amsterdam and a primary listing in Frankfurt, said Monday it wasn’t able to release audited full-year financial results on Wednesday due to matters related to a criminal and tax investigation in Germany. It had previously rejected allegations made in a Manager-Magazin report that Jooste is among employees being investigated by German prosecutors in a 2015 case linked to possible accounting fraud.
Steinhoff shares have slumped 18 percent over the past two days, the most since the Frankfurt listing in December 2015. 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 U.K.
Wiese is South Africa’s fourth-richest person with a net worth of $4.3 billion, according to the Bloomberg Billionaires Index.
Press statement from Steinhoff:
Steinhoff announces investigation into accounting irregularities and resignation of CEO
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.
The Supervisory Board, in consultation with the statutory auditors of the Company, has approached PWC to perform an independent investigation.
Markus Jooste, CEO of Steinhoff has today tendered his resignation with immediate effect and the Board has accepted the resignation. Steinhoff will update the market as the aforesaid investigation proceeds.
The Company will publish the audited 2017 consolidated financial statements 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.
The Supervisory Board has today appointed its Chairman, Dr. Christo Wiese, as Executive Chairman (Delegated Supervisory Chairman) on an interim basis. In addition, Pieter Erasmus, the previous CEO of Pepkor Group, has agreed to join Dr. Wiese in an executive advisory capacity to assist with managing the group’s various retail interests around the world.
Dr Wiese and the Board will supplement the management team and will embark on a detailed review of all aspects of the Company’s business with a view to maximising shareholder value.
The Supervisory Board wishes to reassure shareholders that Steinhoff has a number of high quality profitable businesses around the world. Shareholders and other investors in Steinhoff are advised to exercise caution when dealing in the securities of the Group
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