Steinhoff says payments to ex-chair Christo Wiese broke company rules | Fin24
 
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Steinhoff says payments to ex-chair Christo Wiese broke company rules

Apr 10 2018 14:01
Loni Prinsloo and Janice Kew, Bloomberg

Johannesburg - Steinhoff says two deals with entities related to its former chair and biggest shareholder Christo Wiese didn’t follow proper disclosure processes, dragging the South African billionaire deeper into an accounting crisis.

The agreements were made in the two months leading up to the emergence of financial irregularities that have wiped more than 90% off the value of the retailer since December. Steinhoff [JSE:SNH] has since investigated the deals and is in the process of receiving repayment, it said in a statement.

Wiese said by phone he would comment on Steinhoff’s statement later on Tuesday.

Steinhoff stock plunged as much as 25% in Frankfurt, and traded 10% lower at 11:44 local time.

Wiese has so far distanced himself from the crisis that’s engulfed Steinhoff, the owner of retailers including Conforama in France and The Mattress Firm in the US.

To date, the only executive implicated directly is former chief executive officer Markus Jooste, who quit on December 5, when Steinhoff first reported accounting irregularities. Wiese told lawmakers earlier this year that the announcement came to him as a “bolt from the blue” and that he had no prior knowledge of any wrongdoing.

Off-balance-sheet

Steinhoff has hired auditors at PwC to investigate its accounts, with a particular focus on off-balance-sheet transactions and third-party relations.

“PwC doesn’t look like it’s going to release its report soon, and the longer that this thing drags out the less likely that the company survives,” Michael Treherne, money manager at Johannesburg-based Vestact, said by phone. “That’s my personal view, and that’s a similar view to the market.”

The Steinhoff-Wiese deals were first reported by Johannesburg-based Moneyweb. The website also said Wiese asked the company to cover a margin call on his behalf after Steinhoff reported the accounting irregularities in December. Wiese denied that aspect of the report by phone.

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steinhoff  |  christo wiese  |  accounting fraud  |  retail
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