Steinhoff International sees shares fall by almost two thirds after it said it would launch a probe into accounting irregularities.
Steinhoff has asked accountancy giant PwC to conduct an independent investigation in accounting irregularities, with sources voicing concerns over the “very low tax rate” the company has been paying. Shares in the company, listed in South Africa and Germany, ended the day 63% lower.
The fallout follows a dramatic increase in uncertainty around the group, the integrity of management and what the true state of the business is.
Alwyn Van Der Merwe, director of investments at Sanlam Private Wealth, commented: “The only trustworthy information is that the CEO has resigned and that an investigation into accounting irregularities has been launched.”
Steinhoff owns 40 local brands in more than 30 countries. As well as furniture and homeware, it also sells products including clothing, footwear and consumer goods. Its brands include Bensons for Beds, Poundland and Harveys in the UK, Conforama in Europe, Pep and Ackermans in South Africa and Snooze in Australia.
Markus Jooste had been in charge for close to two decades. The company said late on Tuesday that he had resigned with immediate effect.
Steinhoff’s largest shareholder and chairman, billionaire Christo Wiese, will take over in an executive capacity on an interim basis.