Business In The News South Africa

Steinhoff’s Wiese resigns as chairman as accounting scandal roils company

JOHANNESBURG, December 15 – Troubled retail group Steinhoff said on Friday its chairman and major shareholder Christo Wiese had stepped down amid an accounting scandal that has also seen its chief executive quit and its shares plunge.
“Dr Christo Wiese, Chairman of the Supervisory Board and delegated Supervisory Chairman, today offered to resign from the Supervisory Board,” Steinhoff said in a statement dated Thursday but sent out via the JSE security exchange’s information service on Friday.
“Dr Wiese made this offer in order to reinforce the independent governance of the Company of which he is a major shareholder.”
Steinhoff said its supervisory board had accepted Wiese’s resignation to address any possible conflict of interest that may exist and that he had offered to provide any ongoing assistance that may be required by the company.
In a separate notice, it said various banks that provided funding to an entity ultimately held and controlled by Wiese, had enforced their security rights over approximately 98.4 million shares in the company held by that entity and sold the shares. 
Group CEO Markus Jooste resigned last week after the company said it had uncovered accounting irregularities, prompting a heavy sell-off that slashed more than 80 percent off the value of its shares.
The retail firm, which has its primary listing in Frankfurt, said on Thursday its 2016 consolidated financial statements would need to be restated and could no longer be relied upon. 
South African labour unions say billions of rands worth of workers’ pensions have been lost over the past week or so, through the Government Employees Pension Fund (GEPF) and Public Investment Corporation (PIC) investments in Steinhoff.
Finance Minister Malusi Gigaba met business leaders and officials from the JSE, GEPF, PIC, South African Revenue Service, Financial Services Board and the Independent Regulatory Board for Auditors (IRBA) over the Steinhoff debacle on Friday.
“Government is responsible for protecting the interest of the South African public and decisive action of regulators in South Africa and abroad is being undertaken,” Gigaba told a media briefing after the meeting.
“We are very concerned about the losses which have been sustained.”
The IRBA, which overseas some 4,000 registered auditors, said this week its board had decided to change its approach to sanctions and penalties to bring them in line with local and international regulators.
“There have been too many recent examples of improper conduct by auditors to continue to believe that it is ‘business as usual’,”  CEO Bernard Agulhas said on Thursday.
The main opposition Democratic Alliance said last week it had requested a probe into Steinhoff’s auditor Deloitte over its conduct in what it asserted could be one of the biggest corporate scandals ever in South Africa.
African News Agency (ANA),

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