Poundland owner Steinhoff in turmoil over 'accounting irregularities'

Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

Shares in Poundland's owner slashed by more than 66 per cent as CEO quits amid accounting probe

Steinhoff International, which owns the Poundland and Dealz chains, as well as a myriad of other household and general merchandise retail businesses, has said that it has launched an investigation into accounting irregularities within the company.

The news prompted its shares to plunge to an eight-year low of 15.87 rand (87p) on the Johannesburg securities exchange, wiping 60 per cent of the company's value.

A statement said: "The supervisory board of Steinhoff wishes to advise shareholders that new information has come to light today which relates to accounting irregularities requiring further investigation".

Just hours earlier, Steinhoff had confirmed it was unable to release its latest financial results as planned that morning because it had asked auditors from PwC to examine its accounting practices.

Reuters reported last month that Steinhoff did not tell investors about nearly $1 billion in transactions with a related company, despite laws that some experts say require it to do so.

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Steinhoff previously rebuffed claims made in a report by German magazine, Manager-Magazin, of its former CEO, Markus Joost being amongst employees investigated by German prosecutors in a 2015 accounting fraud case.

The company has said that related to whether revenues were booked properly, and that taxable profit was correctly declared. A spokesman declined further comment and attempts by Reuters to contact Jooste were not successful.

The company also dropped a January 31, 2018 deadline for publishing its audited 2017 consolidated financial statements, saying it would only do so "when it is in a position to do so".

Steinhoff's largest shareholder and chairman, billionaire Christo Wiese, will take over in an executive capacity on an interim basis.

Steinhoff owns 40 local brands in more than 30 countries. "Should the unusual tax rate be at risk, its cash flow would obviously be at risk as well", Kepler said.

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