Steinhoff CEO quits over accounting irregularities

Kristopher Drake
December 7, 2017

"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. Steinhoff Africa said CEO Ben la Grange, who's also chief financial officer of Steinhoff International, resigned.

The company has also postponed its full year results as it calls in accountants from PwC to launch an independent probe into the accounting irregularities.

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

The Supervisory Board appointed its chairman, Dr. Christo Wiese, as executive chairman on an interim basis.

The group has been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg in Germany since the same year. According to the news agency Reuters, investors are now concerned that Wiese may be forced to sell shares he bought previous year with borrowed money, which would depress Steinhoff's stock further.

Steinhoff shares traded 64% lower at €1.08 as of 16:02 in Frankfurt.

The chief executive's resignation will take effect immediately showing how serious it is.

The company also dropped a January 31, 2018 deadline for publishing its audited 2017 consolidated financial statements, saying it would only do so "when it is in a position to do so".

The firm, which was scheduled to publish its annual report on Wednesday, said it would release the results "when it is in a position to do so". Attempts to contact Jooste were not immediately successful.

It warned shareholders it may have to restate past financial statements.

The Financial Times reported that South African audit watchdog Irba said it was watching the Steinhoff developments closely.

The group's share price has fallen 18.2% from Friday's closing price of R55.81 to R45.65 on Tuesday after warning shareholders on Monday its results would not be signed by its current auditors. Deloitte declined to comment due to client confidentially obligations and the ongoing investigations.

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