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Steinhoff shares plunge as it delays results and CEO quits

06 December 2017 - 10:14 By Reuters
Former Steinhoff CEO Markus Jooste
Former Steinhoff CEO Markus Jooste
Image: Jeremy Glyn

Shares in Steinhoff International lost more than half their value on Wednesday after the furniture retailer said it would launch an investigation into accounting irregularities, its chief executive resigned and it postponed full-year results.

Steinhoff's South African shares slumped 60 percent to a seven-year low of 17.56 rand as the Johannesburg securities exchange opened, recovering to 22 rand, still down 52 percent, by 0722 GMT.

The company said late on Tuesday that Chief Executive Markus Jooste had resigned with immediate effect after the discovery of new information prompted the company's supervisory board to ask consultants PwC to perform an "independent investigation".

"The Supervisory Board of Steinhoff wishes to advise shareholders that new information has come to light today which relates to accounting irregularities requiring further investigation," it said in a statement.

The furniture retailer postponed its results announcement and a webcast scheduled for Wednesday until further notice.

Jooste had been at the helm of Steinhoff for nearly 20 years and oversaw its expansion from a furniture manufacturer in South Africa to one of the largest household goods retailers in the world.

Billionaire Christo Wiese, Steinhoff's largest shareholder and chairman, will take over in an executive capacity on an interim basis.

Steinhoff, which has its primary listing in Frankfurt, said Wiese would "embark on a detailed review of all aspects of the company's business with a view to maximising shareholder value".

Steinhoff has also been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg, Germany since 2015. Steinhoff has said that was a tax case relating to whether revenues were booked correctly, and taxable profit correctly declared.

It is unclear what accounting irregularities the company was referring to in its statement on Tuesday. A spokesman declined further comment and attempts to contact Jooste were not successful. 

- Reuters