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Steinhoff scandal escalates, as it reveals 2016 results are not reliable

Poundland store front

Retail Giant Steinhoff International revealed on Thursday morning that its 2016 year end financial results will also need to be restated.

The escalation in their accounting scandal comes after six organisations announced they were investigating Steinhoff after its CEO quit and the company's share price plunged almost 80% from R46.25 last Tuesday to just R9.80 at Wednesday's close.

As well as PWC and the relevant authorities in South Africa, including the Johannesburg Stock Exchange, the Financial Services Board and Parliament, Steinhoff is also being investigated by German authorities.

The dramatic collapse in the company's share price was caused by a late night announcement on 5th December that Steinhoff’s audited year-end results had been delayed, and that CEO Markus Jooste was resigning "with immediate effect" amid suspected accounting irregularities. 

In a note to shareholders this morning it revealed that the investigation would now include the 2016 consolidated financial statements and that based on section 2:362 (6) of the Dutch Civil Code, the 2016 consolidated financial statements will need to be restated and can no longer be relied upon." 

Steinhoff said it is taking all necessary steps to address the audit issues and will keep the market informed of any material developments. It advised shareholders and other investors in Steinhoff to exercise caution when dealing in the securities of the group.

Source: Insight DIY Team

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14 December 2017

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