Update on Steinhoff finances expected this week

 ·18 Dec 2017

Embattled retail group Steinhoff says it will update investors on its financial situation this week, after it meet with banking groups on Tuesday, Reuters reports.

The group has faced a massive accounting scandal, which has wiped billions off of its market value.

Steinhoff has been under investigation for suspected accounting fraud in Germany since 2015. Four current and former managers are under suspicion of having overstated revenues at subsidiaries, prosecutors said.

The company, which owns the Mattress Firm chain in the US, discovered the problems with its previous year’s balance-sheet accounting while reviewing statements from 2017, according to a filing last week.

“The 2016 consolidated financial statements will need to be restated and can no longer be relied upon,” the company said.

The announcement follows a deepening scandal over the company’s finances. Markus Jooste resigned as chief executive officer earlier this month, and the bedding giant appointed auditor PwC to probe accounting irregularities.

Moody’s Investors Service cut Steinhoff’s rating to junk last week in the wake of the announcement.

Billionaire Christo Wiese has been hard-hit by the scandal, with his fortune shrinking by over 609% in the wake of the allegations.

Wiese owns 23% of Steinhoff, and was forced to take overfrom Jooste – however, even he and his family had to step away from directorship of the company.

According to a report by Business Day on Monday, the Financial Services Board is also likely to get involved, as the forced sale of 98.5 million of Wiese’s shares needs to be looked at to make sure that no insider trading rules have been broke.

Read: Deloitte to be probed in Steinhoff mess – report

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