Crisis-hit Steinhoff reports former CEO to police

PUBLISHED: Wed, 31 Jan 2018 12:27:35 GMT

Steinhoff has reported its former chief executive Markus Jooste to South Africa’s elite ‘Hawks’ police unit, the company’s acting chairwoman told a parliamentary committee hearing on Wednesday.

South Africa’s Steinhoff, which owns more than 40 brands including Poundland in Britain, revealed accounting irregularities in December, sparking an 85 percent share price fall that wiped more than $10 billion off its market value.

It has since been scrambling to sell assets and find short-term funds to avoid parts of its business pulling down the sprawling retail empire.

“We don’t know at this stage if the crisis could have been prevented,” Steinhoff’s acting chairwoman Heather Sonn told a joint finance, public accounts and public service administration committee called to get preliminary information on Steinhoff.

She added that the company was committed to fix what went wrong and that it was co-operating fully with all regulators, having reported Jooste to the authorities to investigate suspected corruption.

Jooste, who oversaw the company’s rapid expansion over almost two decades, resigned on Dec. 5 as the accounting scandal broke. The former CEO has not made a public statement since and could not immediately be reached for comment.

The Hawks – full name the Directorate of Priority Crime Investigation – is responsible for investigating national criminal priorities such as serious organized and commercial crimes and serious corruption.

Steinhoff’s former chairman and leading shareholder Christo Wiese, who also spoke at the hearing, said the scandal “came like a bolt from the blue”. Wiese said he became aware of problems at Steinhoff three working days before the company’s accounts had to finalised for a board meeting in December. He said Steinhoff was in “absolute turmoil” at the time “when this bomb exploded.”

Reporting by Wendell Roelf; Writing by James Macharia; Editing by Keith Weir

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.