The Department of Trade and Industry (DTI) and the Companies and Intellectual Property Commission (CIPC) are set to launch an investigation into allegations of accounting irregularities against retail holding company, Steinhoff International.
Steinhoff International is a South African international retail holding company that is dual listed in Germany. The Company deals with mainly in furniture and household goods, which operates in Europe, Africa, Asia, the United States, Australia and New Zealand.
On 6 December 2017, the company’s shares crashed to 65% low on JSE after it revealed “accounting irregularities” and its Chief Executive Officer (CEO) Markus Jooste quit.
In a statement, the DTI and CIPC expressed concern at allegations of governance failures and financial irregularities at the South African retailer that led to the resignation of its Chief Executive Officer, Markus Jooste and Christo Wiese take over.
“The dti and CIPC will be launching an investigation into the allegations in so far as they relate to non-compliance with the Companies Act and Regulations. The dti will further suggest that the Independent Regulatory Board for Auditors (IRBA) also consider the circumstance with regard to the role of auditors in this instance,” it said.
The detailed scope of the investigation was not revealed by the agency and the department. The South African Reserve Bank (SARB) announced on Monday that it plans to investigate the giant company to see if it did not violate its rules.
Steinhoff has been aggressively expanding in developed markets since moving its primary share listing from Johannesburg to Frankfurt in 2015.
It announced that its its largest shareholder and chairman Mr. Wiese would “embark” on a detailed review of all aspects of the company’s business with a view to maximising shareholder value following the announced fall in share-value.
Its South African shares had slumped 61 percent to close at 15.87 rand, after hitting an eight-year low of 13.50 rand in earlier trading.
Meanwhile, the Government Employees Pension Fund (GEPF) has moved to assure its members that their pensions are safe following revelations of accounting irregularities at Steinhoff.