Steinhoff shares plunge 66% as CEO quits amid accounting scandal

Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

The news prompted its shares to plunge to an eight-year low of 15.87 rand (87p) on the Johannesburg securities exchange, wiping 60 per cent of the company's value. 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".

Jooste has been replaced by the chairman Christo Wiese, who will work as executive chairman on an interim basis. Steinhoff said it plans to issue audited 2017 consolidated financial statements "when it is in a position to do so" and will determine whether it needs to restate financial statements from past years. Steinhoff stock closed down 63 percent in Frankfurt, while its bonds also sold off sharply.

The company said (http://www.steinhoffinternational.com/downloads/2017/Announcement%205%20Dec%202017%20JSE.pdf) "new information has come to light today which relates to accounting irregularities requiring further investigation".

The group's share price has fallen 18.2% from Friday's closing price of R55.81 to R45.65 on Tuesday after warning shareholders on Monday its results would not be signed by its current auditors.

The group said that it had approached professional services firm PwC about undertaking an independent investigation into its accounts and that it would update the market as that investigation proceeds.

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Steinhoff moved its primary stock market listing from South Africa to Frankfurt in 2015.

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.

The investigation could result in prior years' financial statements needing to be adjusted.

KAP Industrial Holdings, in which Steinhoff is a major shareholder, fell the most in six months even as the firm said in a statement it is independently managed.

Jooste had tendered his resignation with immediate effect, and the board had accepted it, Tuesday night's statement said. Theodore de Klerk was appointed as his replacement, PSG said on Wednesday.

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