Steinhoff says accounting issues stretch back to at least 2015
* 2016 results also to be restated
* Earlier results maybe restated as well
* No timeline for completion of PwC investigation
(Adds hedge fund comment, details, updates shares)
By Tiisetso Motsoeneng
JOHANNESBURG, Jan 2 (Reuters) - Steinhoff
will have to restate its 2015 accounts and maybe earlier
figures, the South African retailer said on Tuesday, having
already warned on its 2016 numbers.
The owner of more than 40 retail brands including Conforama,
Mattress Firm and Poundland is fighting for survival after
flagging accounting irregularities last month and parting ways
with its veteran chief executive, Markus Jooste.
A review being carried out by accounting firm PwC now
suggests that "accounting irregularities" may stretch beyond
2015, it said.
"Whilst the internal review and investigation into the
accounting irregularities have not yet concluded, the
restatement of the financial statements ... for years prior to
2015 is likely to be required," Steinhoff said in a statement.
The company last month postponed its 2017 results until the
investigation is over. Steinhoff said the timeline for the
completion of the investigation remained uncertain.
The company had reported a 1.4 billion euros ($1.69 billion)
net profit in 2016 while its 2015 accounts showed earnings of
959 million euros, according to Steinhoff's annual reports.
"The latest information confirms what we've suspected all
along (about the reliability of the results for 2015 and
beyond)," one hedge fund manager said, declining to be named.
"What we're eagerly waiting for is the outcome of the PwC
The accounting scandal marks a fall from grace for the
retailer which has grown rapidly via an international M&A spree
that began in 2011 with the acquisition of Conforama, Europe's
second biggest furniture retailer.
It has also tainted the reputation of Steinhoff's chairman
and biggest shareholder Christo Wiese, considered one of South
Africa's most respected stewards of shareholder capital.
Shares in Steinhoff, once dubbed Africa's IKEA, have fallen
around 90 percent since news of the accounting irregularities
broke in early December, wiping 185 billion rand ($14.99
billion) off its market value.
It warned then that there was a 2 billion euro ($2.4
billion) hole in its balance sheet and has since said that some
credit facilities have been suspended or withdrawn as it
grapples with more than 10 billion euros in outstanding debt.
Separately, the company has been under investigation for
suspected accounting fraud in Germany since 2015. It moved its
primary share listing from Johannesburg to Frankfurt late that
Four current and former managers are under suspicion of
having overstated revenue at subsidiaries, prosecutors said.
Steinhoff has said the German investigation relates to
whether revenue was booked properly, and whether taxable profits
were correctly declared.
Steinhoff shares were up nearly 8 percent in Johannesburg at
($1 = 0.8289 euros)
($1 = 12.3419 rand)
(Editing by Ed Stoddard and Jane Merriman)
First Published: 2018-01-02 09:26:23
Updated 2018-01-02 14:58:37
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