Finance

Poundland owner Steinhoff sees its shares crash by up to 66%

Poundland owner Steinhoff sees its shares crash by up to 66%

Steinhoff International shares plummeted on Wednesday as its chief executive officer Markus Jooste resigned with immediate effect amid "accounting irregularities", while the release of the company's 2017 numbers has been postponed. Its stock was down in Frankfurt by 66 percent following the news.

Its 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". The Supervisory Board, in consultation with the statutory auditors of the Company, has approached PWC to perform an independent investigation.

Chairman Christo Wiese will take the role of executive chairman on a temporary basis, while Pieter Erasmus - formerly chief executive of Pepkor Group, one of Steinhoff's African subsidiaries - will help Wiese in an advisory capacity.

The group said in a stock exchange announcement: "Steinhoff will update the market as the aforesaid investigation proceeds".

The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared.

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It is not clear if these are the accounting irregularities Steinhoff is referring to in its latest statement.

In light of the developments at Steinhoff, STAR CEO Ben la Grange has chose to step down as CEO of STAR.

After initially falling 60 per cent to a seven year low, the shares in Steinhoff, which owns 40 local brands in more than 30 countries, later recovered but were still down 52%. Despite the acquisitions of profitable companies, no loss carry-forwards, the company recorded a very unusual tax rate of circa 15% and also guided that this would be the rate going forward.

Kolb also raised the possibility that as chairman, Wiese's role could now come under scrutiny too.