Steinhoff slides further on accounting scandal
Steinhoff parted ways with veteran chief executive Markus Jooste and appointed auditing firm PwC to investigate ‘accounting irregularities’ at the company.
JOHANNESBURG - Shares in Steinhoff plunged more than 30% on Thursday, extending dramatic losses suffered the previous session after the South African retailer revealed “accounting irregularities” and its chief executive quit.
Steinhoff’s statement shocked investors who had backed the rapid reinvention of a small furniture chain into an international retailer empire.
By 07.48 GMT, the stock had slid 37% to R11.05 in Johannesburg, adding to a more than 60% plunge in the previous session. It was down about 34% in Frankfurt where it had had its primary listing since 2015.
“One of the reasons we owned Steinhoff was because of the management’s ability in sweating their assets. That has now changed, management has turned out to be a liability,” said Michael Treherne, a fund manager at Vestact in Johannesburg.
Steinhoff, which owns Mattress Firm in the US and Poundland in Britain, parted ways with veteran chief executive Markus Jooste and appointed auditing firm PwC to investigate “accounting irregularities” at the company.
It also put billionaire Christo Wiese, its largest shareholder and chairman, in charge.
It sought to give “additional comfort” to investors worried about its ability to fund its existing operations, saying it had identified measures that would give it around 2 billion euros ($2.4 billion) of additional liquidity.
LISTEN: Steinhoff share price fell 70%. Why was trade not suspended?