Poundland owner Steinhoff reports accounting irregularities

South African retail giant Steinhoff International, which owns discount chain Poundland in the UK, has discovered accounting irregularities and has called in PwC to investigate, while the CEO has left the company

In a statement the company 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.

‘Markus Jooste, CEO of Steinhoff has today tendered his resignation with immediate effect and the board has accepted the resignation.’

Steinhoff, which is incorporated in the Netherlands and trades on the Frankfurt stock exchange, said it will update the market as the investigation proceeds.

It also stated: ‘The company will publish the audited 2017 consolidated financial statements when it is in a position to do so. In addition, the company will determine whether any prior years’ financial statements will need to be restated.’

Earlier this month the company put out a statement saying the 2017 consolidated financial statements will be released ‘albeit in unaudited form’ on schedule on 6 December 2017.

The statement said: ‘In connection with the audit of the consolidated financial statements of the company for the financial year ended 30 September 2017, the supervisory board and the statutory auditors of the company have not yet finalised their review of certain matters and circumstances, most of which were raised by the criminal and tax investigation in Germany (as previously reported).

‘No additional information came to light to change the previous views expressed regarding the investigation. The company expects to publish the audited 2017 consolidated financial statements before 31 January 2018.’

The board’s chairman Dr Christo Wiese has been appointed as executive chairman (delegated supervisory chairman) on an interim basis. In addition, Pieter Erasmus, the previous CEO of Pepkor Group, has agreed to join Wiese in an executive advisory capacity to assist with managing the group’s various retail interests around the world. Both executives ‘will embark on a detailed review of all aspects of the company’s business with a view to maximising shareholder value’, the statement said.

Steinhoff has extensive UK interests, including Poundland, Harveys, Benson for Beds and Pep &co. Poundland UK was acquired in July 2016 for £597m by the company which owns over 30 discount retail chains around the world.

Steinhoff’s auditor is Deloitte in South Africa. 

Report by Pat Sweet

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