JSE investigating Steinhoff but won't halt trade | Fin24

JSE investigating Steinhoff but won't halt trade

Dec 11 2017 15:58
Jan Cronje

Cape Town - The JSE has reiterated that it won't halt trading in the shares of global retailer Steinhoff International at this stage. 

“We believe that under the circumstances where Steinhoff International has disclosed as much price sensitive information as it is able to, it would be detrimental to the interest of investors to prevent them from trading Steinhoff International shares on the JSE,” it said in a media statement. 

Shares in the Stellenbosch-headquartered company have fallen by 83% since Wednesday morning, when it announced its CEO Markus Jooste was stepping down “with immediate effect” and PricewaterhouseCoopers would conduct an independent investigation into "accounting irregularities requiring further investigation”. 

The multinational company has 12 000 stores in more than 30 countries, and employs over 130 000 staff. In South Africa some of its well-known brands include Ackermans, Pep, Tekkie Town, Russells and HiFi Corp.

The JSE, which listed Steinhoff in 1998, said on Monday that Steinhoff has “disclosed as much information regarding its current financial position as it is able to”.

The company has not, however, released its audited financial results for 2017.  

In a statement on Monday Steinhoff said its audit committee is “working with our statutory auditors, Deloitte to facilitate the release of our audited financial statements.”

These statements must be released by January 31 2018.

'Serious impact'

“The JSE recognises the serious impact the recent disclosures by Steinhoff International regarding accounting irregularities has had on investors,” said the JSE, adding that it has launched an investigation to determine if there have been any breaches of its listing requirements. 

“This includes any breaches in relation to previous financial disclosures made to the public by Steinhoff International,” it said. 

It added that the Frankfurt Stock Exchange, where Steinhoff has since 2015 had its primary listing, has not suspended trade in the group’s shares. 

On Friday Patrick Kalbhenn, spokesperson for Deutsche Börse AG, told Fin24 that “a sharp decline alone is no reason for a trading suspension”.

He added that, in general, the only reasons for a trade suspension at the FSE are technical and connection faults, information imbalances and indications of market manipulation.

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