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German prosecutors still probing Steinhoff for possible accounts fraud

Dec 07 2017 07:17
Jan Cronje

Cape Town - The public prosecutor's office of Oldenburg in Germany said on Wednesday afternoon that it was still investigating possible accounting irregularities and fraud at Steinhoff.

The stock of Steinhoff International [JSE:SHF] plunged by a record 62% on Wednesday, after CEO Markus Jooste quit in the wake of irregularities in the company’s accounts.

Billionaire Chairperson Christo Wiese will run the company on a temporary basis.

Steinhoff, which has its corporate seat in Amsterdam, trades on the German and South African stock exchanges. 

In a statement emailed to Fin24, the prosecutor did not specifically name Steinhoff, but according to multiple reports in German media, Steinhoff is the company referred to in the probe.

The statement did mentioned a furniture retailer company from Westerstede, Germany, where Steinhoff has its European headquarters.

Steinhoff announced in its own statement late on Tuesday that it had approached PwC to launch an independent investigation into accounting irregularities, and that CEO Markus Jooste had resigned with immediate effect.

'Accounting fraud'

German prosecutors said that, as previously reported, they were still investigating “four current and former managers of a group” for accounting fraud. 

The statement said the balance sheet of the company may have been inflated. German authorities, meanwhile, are still scrutinising and evaluating the “extensive documents and data” obtained during searches.

It did not say when these searches took place.

The prosecutor's office said it could not yet say when its investigation would be complete. 

In November 2015, ahead of its listing of the Frankfurt Stock Exchange, Steinhoff said in a media announcement that German authorities had searched its offices.

Fin24 could not confirm if these were the searches referred to in the statement. 

Approached for comment earlier on Wednesday, a spokesperson for Steinhoff said: 

"Steinhoff is currently not in a position to provide any additional information other than that available to the public via the stock exchange news service."

"The Company will publish the audited 2017 consolidated financial statements when it is in a position to do so. We will come back to you as soon as there are new developments to be communicated."

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steinhoff international  |  retail  |  fraud

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