Shares in Poundland’s South African owner Steinhoff have dived by 60 per cent after the group announced it was launching an investigation into ‘accounting irregularities.’
Steinhoff also announced its chief executive, Markus Jooste, who has been in charge for nearly two decades, was resigning from the company with immediate effect.
With an independent investigation conducted by accounting firm PricewaterhouseCoopers in full swing, Steinhoff has postponed the publication of its full year results.
Plunging: Shares in Poundland’s South African owner Steinhoff have dived by 60 per cent
‘Shareholders and other investors in Steinhoff are advised to exercise caution when dealing in the securities of the Group’, Steinhoff said in a statement.
While telling its shareholders to exercise caution, the group also sought to ‘reassure’ them it has a ‘number of high quality businesses around the world.’
Steinhoff gave no details of the accounting issues at play, stating the matter ‘relates to accounting irregularities requiring further investigation.’
The group’s share price hit a seven-year low of 17.56 rand, or 97p, on the Johannesburg stock exchange.
In a stock market announcement, the group added: ‘Steinhoff will update the market as the aforesaid investigation proceeds.
‘The company will publish the audited 2017 consolidated financial statements when it is in a position to do so.
Links: Steinhoff owns stakes in Virgin Active, New Look and food chain Iceland
‘In addition, the company will determine whether any prior years’ financial statements will need to be restated.’
With Mr Jooste no longer at the helm, Steinhoff has appointed its chairman South African retail billionaire Christo Wiese as interim executive chairman.
South-Africa based Steinhoff owns Poundland in the UK, as well as Harveys and Bensons for Beds.
The company also owns stakes in Virgin Active, New Look and food chain Iceland.
Last year Steinhoff warned the collapse in the value of sterling following the EU referendum could have an adverse impact on its operations in the UK.
The South African group said sterling’s plunge could result in an ‘unfavourable effect when translating out businesses’ earnings reported into euro’.
Internationally, Steinhoff is behind 12,000 retail outlets with around 130,000 employees.
Last year, the group acquired Poundland for £610million and lost a bidding battle with Sainsbury’s for the takeover of Argos owner Home Retail Group.