Steinhoff International’s chairman and largest shareholder, South African billionaire Christo Wiese, is stepping down from the supervisory board after an accounting scandal engulfed the retail giant.
The board accepted Wiese’s resignation to resolve questions of conflict of interest, the owner of furniture chains such as Mattress Firm in the US and Conforama in France said in a filing Thursday. Heather Sonn, a member of the board and its independent subcommittee, will take the role of acting chairman.
The resignation comes a day after Steinhoff said its accounting errors stretch back into 2016, highlighting the extent of wrongdoing at the retailer that’s led to a more than 80% stock slump since the beginning of last week. The retailer is due to meet with banks to try to navigate a way out of its crisis, which has wiped more than 10 billion euros ($11.8 billion) off the value of the company.
At stake is the future of a retailer with 130,000 employees and international brands that also include UK discounter Poundland. Wiese, 76, had stepped in to lead the company on an interim basis last week after Markus Jooste quit as chief executive officer as Steinhoff postponed publishing its financial results. Auditor PwC was appointed to probe accounting irregularities.
Wiese’s son Jacob also resigned from the board, Steinhoff said. The departures are the company’s latest efforts to restore order as it works with Moelis & Co. to seek a lifeline from lenders and with AlixPartners LLP to advise on “liquidity management and operational measures.”
Christo Wiese has seen his net worth plunge by more than $2 billion since the scandal deepened last week, marking an abrupt reversal to one of South Africa’s most ambitious global business forays. Steinhoff shares, which have their primary listing in Frankfurt, fell 13% on Thursday before the resignations were disclosed. The company now has a market value of 2.43 billion euros.
Banks that provided funding to an entity controlled by Wiese have sold 98.4 million Steinhoff shares, exercising their security rights over the stock, the company said in a separate statement Thursday. The company didn’t name the lenders.
The elder Wiese built up clothing seller Pepkor in South Africa over several decades, expanding it into Africa’s biggest retailer. In 2014 he sold it to Steinhoff, a furniture chain run by Jooste. The combined companies then accelerated their international expansion with acquisitions in Europe and the U.S.
Now, in a fight for survival, the company has put 1 billion euros in noncore assets up for sale, and it has said it’s examining the “validity and recoverability” of another 6 billion euros worth of assets.