The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Steinhoff International Holdings NV said two deals with entities related to its former chairman 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 percent off the value of the retailer since December. Steinhoff 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 percent in Frankfurt, and traded 10 percent lower. 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.
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.