Steinhoff shares nosedive after CEO Markus Jooste resigns

Steinhoff CEO

Steinhoff International CEO Marcus Jooste resigned on Tuesday night, and the release of the company's full-year results - originally scheduled for Wednesday - has been delayed indefinitely.

Its European operation expanded a year ago to include United Kingdom discount retailer Poundland.

Shares in Poundland's parent firm Steinhoff International have lost more than 60% of their value after its chief executive quit amid allegations of accounting irregularities.

The company has asked PWC to conduct an independent investigation into the matter.

Jooste has been replaced by the chairman Christo Wiese, who will work as executive chairman on an interim basis.

The company said (http://www.steinhoffinternational.com/downloads/2017/Announcement%205%20Dec%202017%20JSE.pdf) "new information has come to light today which relates to accounting irregularities requiring further investigation". The company later said its chief financial officer remained in his position and there was no evidence to suggest he had any involvement in the matters being investigated. "In addition, the Company will determine whether any prior years" financial statements will need to be restated'. Besides Australia and South Africa, it owns retail chains in the UK, Europe and the USA, as well as controlling other African retailing businesses.

The company stressed that it still had profitable businesses in its portfolio and urged investors to "exercise caution" when trading its shares in the wake of the disclosures. Steinhoff derives about 60% of its earnings in Europe and 34% in Africa.

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.

Over near two decades Mr Jooste has overseen Steinhoff's expansion from a South African furniture manufacturer to one of the world's biggest household goods retailers.

Kepler Cheuvreux said the pending tax and accounting investigations "could show severe irregularities".

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

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