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Steinhoff shares tumble after accounts, PwC probe delayed

PwC report delayed until February.

A probe into accounting irregularities at Steinhoff International and the release of the retailer’s restated results have been delayed, it said on Thursday, sending its shares down as much as 21%.

The company, engulfed in one of South Africa‘s biggest corporate scandals, said it had been forced to abandon plans to publish both its 2017 and 2018 financial statements by the end of January 2019, citing delays to a forensic investigation being conducted by auditors PricewaterhouseCoopers (PwC).

The investigation is being carried out a year after the owner of brands including France’s Conforama and Britain’s Poundland admitted to “accounting irregularities”, sending its shares plunging and leaving it fighting for survival.

Read: One year on and Steinhoff’s Jooste is still left in peace

Steinhoff said its group audited financial statements would now be released by mid-April 2019, with the probe by PwC expected to be completed by the end of February rather than the end of this year.

“Unfortunately, despite significant efforts being exerted by all parties, it is now clear that the timeline for completing the group consolidated financial reporting and audit process has shifted and it will not be possible for all the work required to be finalised within the original timeframe,” the company said in a statement.

Steinhoff shares were down 12.4% to R1.56 at 07:35 GMT after shareholders learned they will have to wait even longer to understand what happened at the firm and what its remaining assets are truly worth.

Steinhoff feels fresh pain on delays

PwC said in March it had sent around 3.3 million records, such as emails, for analysis and the contents of laptops and mobile phones were being copied by investigators in what it described as a complex investigation.

Regulators from South Africa, Germany and the Netherlands are combing the evidence for clues and possible culpability in the spectacular fall from grace of the sprawling retail empire.

Steinhoff’s December 2017 disclosure led to the resignation of CEO Markus Jooste and chairman Christo Wiese, who had overseen the firm’s rapid expansion over almost two decades.

The retailer said PwC’s final report would be made available to the company shortly after the its conclusion.

The 2017 and 2018 financial statements of the company’s wholly owned subsidiary, Steinhoff Investment, will be released shortly after the group’s results, it added. 

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Can someone please make a court application to have Steinhoff liquidated, so the current board is removed and qualified, independent and untainted persons can take control.

This situation is “out of control” and the executives feel nothing other than for themselves and their pockets.

Loving this drop…bought even more. There is no way Steinhoff will fail. To big to fail. Cant understand the massive over-reaction to every piece of news. So PWC is taking a bit longer to finalise an extremely complex investigation….so what? Doesnt change a single thing about what has happened, or the fact that the Steinhoff entites continue business as usual and the creditors are making cencessions to save the company. Great buying oppurtunity with 3-5 year view.

Must be painful to be long this heartbeat-less puppy.

Zero is also a number.

HS:

1. There is never only the one cockroach you saw.

2. I doubt people think there are no assets, it is just that:
2.1 distressed sellers get beaten up, go look at an auction. Go look at what they had to unload joint venture interests at because there is only one buyer for their portion.
2.2 once the assets are fairly valued the liabilities not yet recorded (from litigation and suits) will potentially dwarf the assets.

3. On the positive side – imagine the capital losses deduction 😉

You would get a margin call if the losses were not limited to the value of your shares. The company lost 97% of its market cap due to accounting fraud. The claims from investors will be for 3200% of the current market cap. If the claimants are successful and the court awards compensation, this baby will be as bankrupt as she can be.

I fail to understand how the board and the auditors could be so wrong on timelines – it merely demonstrated the ineptness with which they perform their board or auditor functions. The report was agreed to be completed by 31/12/2018 and here at the 11th hour its delayed by 2 months – suppose come mid February they will issue a bulletin that it has been extended yet again due to the presence of the silly season and company closures as the majority of manufacturing companies close down next week.
I sincerely hope that the board and the auditors receive no emoluments between end December and when the report is finally produced – called it penalties for poor performance. My opinion – Zinn is too light weight for the job she is supposedly doing at Steinhoff

Apologies – not Zinn but should read Sonn in above comment

…..buying time maybe?

No, I don’t think so. More likely it will be that the group is hopelessly and irrevocably bust. Take what pennies you can and move on.

Obvious. Good news like faults, wrong decisions, bad timing, did not emerge while digging in pyramid steinhof. Making results available to the public will be bad timing. The country is booming an out of recession. Reading lines of the corporate raping willfully financials resources by accounting fairy tales will be proven otherwise.

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