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Fedusa requests access to inspect Steinhoff records

The global retailer lost more than 60% of its stock value on the JSE last year after CEO Markus Jooste stepped down amid allegations of accounting irregularities.

Steinhoff's offices in Stellenbosch. Picture: Supplied

JOHANNESBURG - Steinhoff says a review by auditors at PricewaterhouseCoopers will focus on certain off-balance sheet structures and deals where some assets and revenue are likely to be overstated.

The global retailer lost more than 60% of its stock value on the JSE last year after CEO Markus Jooste stepped down amid allegations of accounting irregularities.

Concerns were raised in South Africa because the Public Servants Association Pension Fund invested billions in Steinhoff.

Workers have since been assured their pensions are safe.

Meanwhile, the Federation of Unions of South Africa has requested access to inspect Steinhoff's records.

The union's Dennis George said: "They gave us the minutes for the meeting from 2002. The CEO he was the person that manipulated the process. So, when they looking at a position in Europe, so when a company didn’t perform, they would inflate those particular numbers. The biggest impact of this thing was central Europe – more specifically."

Steinhoff said on Wednesday that its first-quarter retail revenue had fallen and its working capital “had dried up” since the scandal broke.

The multinational retailer has been fighting for survival after it discovered accounting irregularities in December which sparked a sell-off that wiped more than $10 billion off its market value and led to multiple investigations globally.

The retailer said revenue for the period to end-December fell by 5% to €4.86 billion.

“The group’s essential working capital, especially in its businesses outside of South Africa, largely dried up as the access of our operating businesses to their banking facilities and other credit lines was severely constrained,” the company’s acting chairwoman Heather Sonn said in a statement.

Steinhoff was “working hard to uncover the truth and to prosecute wrongdoing” and was also cooperating with regulators, she said.

The company also said many of its international business, particularly its European business, were at risk of failing to meet their financial obligations.

The firm warned in January that it will have to restate its 2015 accounts and maybe earlier figures, having already cautioned on its 2016 numbers.

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