Steinhoff accounting scandal may date back to at least 2014 - reports

Markus Jooste. (Gallo Images)
Markus Jooste. (Gallo Images)

Cape Town - The accounting scandal at embattled South African retailer Steinhoff may stretch back further than previously known, according to new media reports. 

German daily the Süddeutsche Zeitung, broadcaster Norddeutscher Rundfunk, and SA site Moneyweb have reported that previously unpublished emails appear to show that former Steinhoff CEO Markus Jooste was in email contact with German Steinhoff managers about allegedly misrepresenting financial data in 2014. 

In 2014 Steinhoff still had its primary listing on the JSE, changing this to the Frankfurt Stock Exchange in late 2015.

According to the joint investigation, the emails make a case that more people knew about manipulation of financial data than previously known. 

Fin24 has not seen the emails, but Moneyweb published excerpts from the emails on Thursday.

In response to a request for comment on Thursday, a spokesperson for Steinhoff said that the group had sent copies of the emails to PwC, which is conducting a forensic investigation into the group's finances.

"We reiterate that Steinhoff is determined to ascertain the true and correct facts and to uncover all information required to take action against any individuals that may have been involved." 

Fin24 could not reach Jooste for comment. 

Steinhoff’s former CEO abruptly resigned from the company in early December 2017. He has not publicly spoken to the media since stepping down. 

In early February Steinhoff announced that it had reported Jooste to priority crime investigating unit the Hawks on suspicion of fraud. Steinhoff’s acting chair Heather Sonn said on Wednesday that the matter was “now in the hands of the Hawks for further investigation and potential prosecution”.

Since Jooste's resignation, almost R200bn in shareholder value has been lost, with Steinhoff shares losing over 85% of their value. Steinhoff shares were trading down 8.10% on the day at R5.33 at 13:30 on Thursday.

Revenues down, PwC investigation ongoing

The reports come as Steinhoff published its long-waited revenues for the first quarter of 2018 on Wednesday evening.

An unaudited trading update for the three months to end-December 2017 showed that the group’s global revenues had fallen by 5% over the prior comparative period. 

Revenues for Q1 2018 were €4.86bn, down from €5.1bn in Q1 2017.

Steinhoff has previously said it would only be able to provide audited figures once an ongoing PwC forensic investigation into its books has been completed. 

Sonn said Wednesday that the “substantial, complex and time-consuming” investigation is still ongoing. 

“While the company is determined to get to the bottom of the accounting irregularities as quickly as possible, it is essential that PwC is allowed sufficient time to conduct a thorough investigation to determine precisely what has taken place,” she said. 

“The scope encompasses analysis of potential accounting irregularities and/or non-compliance with laws and regulations, concerns raised by Steinhoff’s auditor, Deloitte, and any other issue brought to the attention of PwC that requires investigation. 

"Although early in the investigation, it appears at this stage that the accounting irregularities relate largely to the group’s Central European business.”

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