Shares in Poundland owner Steinhoff slump 60% over 'accounting irregularities'

Steinhoff tanks 57% as CEO leaves amid accounting probe

In November of that year, German authorities searched Steinhoff offices in the town of Westerstede and visited private homes as part of an investigation by prosecutors in the German town of Oldenburg (near where Steinhoff's European HQ is based) into four current and former managers. The board has also approached auditor PWC to investigate allegations of irregular accounting practices.

Poundland parent company Steinhoff International has seen its shares plummet 66 per cent as chief executive Markus Jooste resigned with immediate effect amid an accounting scandal.

Steinhoff's chairman, retail tycoon Christo Wiese, alongside former Pepkor CEO Pieter Erasmus, will run Steinhoff until a new CEO is appointed, a statement issued at 10.45pm on Tuesday night said. The company had been expected to release its results for the year ended September 30 on Wednesday, but said it would now publish results when it was in a position to do so.

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

Shares in Steinhoff, which is listed in the Netherlands, plummeted nearly 60 per cent in early trading.

The group holds 6,500 retail outlets and 40 brands worldwide, including Bensons for Beds and Harveys in the UK.

"The Supervisory Board wishes to reassure shareholders that Steinhoff has a number of high quality profitable businesses around the world", the company said in a statement. Steinhoff derives about 60% of its earnings in Europe and 34% in Africa.

The company's Supervisory Board said that "new information has come to light today which relates to accounting irregularities requiring further investigation".

Steinhoff has been aggressively expanding in developed markets since moving its primary share listing from Johannesburg to Frankfurt in 2015, snapping up Britain's Poundland, US-based Mattress Firm and Australia's Fantastic.

It is not now clear what "accounting irregularities" the company is referring to in its statement.

The JSE's director of issuer regulation John Burke told Reuters the bourse was in talks with Steinhoff to get answers on the investigation of possible accounting irregularities.

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