Business 2.1.2018 11:40 am

Steinhoff says will have to restate 2015 financial statements

Beleaguered retailing group Steinhoff International Holdings N.V. said on Tuesday its 2015 financial statements, in addition to the 2016 accounts, could no longer be relied upon.

In a statement, Steinhoff, which was engulfed by an accounting scandal last month, leading to the resignation of CEO Markus Jooste, said its audited 2017 consolidated financial statements would be accompanied by the restated 2016 statements.

Chairman Christo Wiese, a major shareholder, also later resigned, citing concerns about conflict of interest.

In addition, the consolidated statements of financial position would be accompanied by a restated comparative 2015 statement of financial position of Steinhoff International Holdings Proprietary Limited, the former listed holding company of the group.

This would provide additional insight into the cumulative and consolidated opening balances in the 2016 restated consolidated statement of financial position.

“Due to the restatements, the 2016 and 2015 financial statements of Steinhoff International Holdings Proprietary Limited can no longer be relied upon,” it said.

On Tuesday, the company said the accounting irregularities, which were the subject of an internal review and an investigation by accounting firm PwC, also affected the consolidated financial statements of Steinhoff Investment Holdings Limited by virtue of its ownership of certain European subsidiaries until 1 April 2016.

But the restatements would not apply to Steinhoff Services Limited, an issuer of listed bonds on the JSE securities exchange.

The group said the timeline for completion of the internal review by its management team, as well as the PwC probe, remained uncertain.

The accounting scandal triggered a heavy sell-off that slashed more than 80 percent off the value of its shares in December.

South African labour unions said billions of rands worth of workers’ pensions were lost through the Government Employees Pension Fund (GEPF) and Public Investment Corporation (PIC) investments in Steinhoff.

Steinhoff scandal points to major gaps in stopping unethical corporate behaviour

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