Global retailer Steinhoff, with over 40 local brands in more than 30 countries, has announced accounting irregularities in the company. This prompted the company’s CEO, Markus Jooste, to resign with immediate effect.
1. After the announcement, Steinhoff’s share price collapsed by 9.15%, therefore down 36% so far this year.
2. Steinhoff rejected media reports last month that it did not inform investors about deals worth $1 billion. The Supervisory Board today gave further consideration to the issues subject to investigation, and to the validity and recoverability of certain non-South African assets of the company. This amounts to €6 billion (R96 billion).
3. Earlier this year Jooste was being investigated by prosecutors for fraud. The company had taken 4 months to respond to respond to a red flag.
4. Steinhoff contributes to a large portion of the pension funds of a l owns PEP, Ackermans, Russells, Incredible Connection, Hi-Fi Corporation and Unitrans Aside, and aside from employing 130 000 employees,
5. Given the company’s influence over state employee pension funds, CEO of Sygnia, Magda Wierzycka, describes it as “the biggest corporate failure on the JSE”.