Steinhoff says the rot may go deeper

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Steinhoff says the rot may go deeper

Published Date: 2017-12-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Steinhoff says the rot may go deeper

The group says its 2016 financial statements can no longer be relied upon as Christo Wiese steps down as Supervisory Board chairman

Christo Wiese stepped down as chairman of Steinhoff's Supervisory Board last night after the retail giant said an an independent committee of its Supervisory Board wanted to take a closer look at its 2016 financial statements. Last week the group postponed the release of its 2017 statements after its auditors refused to sign off on them. The committee is busy scrutinising its European balance sheet assets and believes issues around their validity and recoverability are also relevant to last year. It says the 2016 statements will need to be restated and can no longer be relied upon.

Wiese, who is also a major shareholder in Steinhoff, offered to resign in order to avoid any possible conflict of interest that may exist, the group said in a statement. Supervisory board member Heather Sonn will take up the post of acting chairperson.

Steinhoff set up the independent committee last week, headed by African Rainbow Capital co-CEO Johan van Zyl, to bolster the independent governance of the group. PwC was appointed as forensic investigators and it hired US investment bank Moellis & Company and management consultancy AlixPartners to advise it.

It is due to update lenders next week on its ongoing operational and financial situation and has asked them not to call in their facilities as it tries to stabilise its finances.

Steinhoff said, on the advice of the independent committee and their advisers, that it was taking all necessary steps to address the audit issues and would keep the market informed of any material developments.

Its shares plunged 89% last week after CEO Markus Jooste quit after the company halted the release of its results after uncovering accounting irregularities. They recovered slightly earlier this week but fell 9% to R8.92 yesterday.



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