Steinhoff International Holdings NV collapsed after its chief executive resigned amid accounting irregularities, shaking a company that quickly expanded from its roots in South Africa to a retail empire spanning Australia, Europe and the US. UU
The owner of France- the furniture chain Conforama, Mattress Firm in the USA. UU and Poundland in the United Kingdom said late on Tuesday that CEO Markus Jooste resigned when he appointed auditor PwC to investigate the matter. The shares fell up to 60 percent on Wednesday in Frankfurt, eliminating more than 7 billion euros ($ 8.3 billion) in value.
The findings mark a radical change for billionaire President Christo Wiese, the fourth richest man in South Africa and Steinhoff's largest shareholder, who assumes the role of CEO on an interim basis. Since he bought the company in 2014, he accelerated an acquisition momentum along with his long-time ally Jooste, who has been with the retailer since 1988. In addition to purchases such as Bensons for Beds in the United Kingdom, the company has made games for appliances. Darty chain in France and retailer of household goods Argos in Great Britain.
"The trust between Wiese and Jooste is broken, that's why Jooste is out," said Syd Vianello, an independent retail analyst in Johannesburg. over the phone "Wiese has a huge amount of money at stake and it is convenient to ensure that the trust in the company is restored."
Wiese, 76, did not immediately respond to calls to his office and cell phone. It had a net worth of $ 4.3 billion until Tuesday, according to the Bloomberg Multimillionaires Index. He and Jooste own properties in the quaint wine country of Cape Town, along with other South African entrepreneurs, including Whitey Basson, who ran the retailer Shoprite Holdings Ltd. for 37 years until the beginning of this year.
Steinhoff shares traded 58 percent less at 1.25 euros from 10:40 a.m. in Frankfurt. The action closed at 5,075 euros on its first trading day in the German city in December 2015, when the company moved its primary list of Johannesburg.
The turbulence has implications for Steinhoff Africa Retail Ltd., which split off from its father in September, and Shoprite, in which Wiese is also the largest shareholder. Steinhoff Africa fell to 29 percent in Johannesburg, while Shoprite fell to 6.3 percent, the biggest drop in almost a year. Steinhoff Africa said that CEO Ben La Grange, who is also CFO of Steinhoff International, resigned.
"I doubt that Steinhoff will collapse," Owen Nkomo, chief executive of Moneyunzi Wealth Group, based in Johannesburg, said by telephone. "I'd rather take a chance and buy Steinhoff than Bitcoin."
The retailer has indefinitely delayed the publication of financial results, which had been scheduled for Wednesday, citing a criminal and tax investigation in Germany. This investigation dates from 2015, when the German authorities entered the European headquarters in that country.
Prosecutors have said that they are looking for contracts valued at three-digit euros that appeared to have been made with third parties, but could actually have involved different units within the company.
said in August that "there is no evidence" that Steinhoff broke Germany's commercial laws. He also said that a report in Manager-Magazin that Jooste is one of the employees investigated by German prosecutors contained information that was "erroneous or misleading".
The company is involved in ongoing civil litigation, even with a former joint venture partner – and the result "should result in a monetary remedy to be paid by the group," Steinhoff said in August.
Steinhoff's international debt also plummeted, with 800 million unsecured senior notes maturing in 2025 that fell as much as 41 cents in the euro to 42 cents, according to data compiled by Bloomberg. The notes were issued in July and have a Baa3 investment grade rating from Moody & s Investors Service.
– With the assistance of Janice Kew, Tom Beardsworth, Karin Matussek and Renee Bonorchis