Steinhoff rocked as CEO Jooste quits over Accounting wrongdoing

Steinhoff International Holdings NV plunged after its chief executive officer resigned amid accounting irregularities, in a reversal of fortune for a south African billionaire who upended the retail industry in Africa and Europe via a series of acquisitions.

The owner of the France-based Conforama furniture chain, Mattress Firm in the U.S. and Poundland in the U.K. said Tuesday that CEO Markus Jooste quit as it appointed auditor PwC to probe the matter. The stock slumped as much as 62 percent early Wednesday in Johannesburg.

The findings mark a striking turnabout for billionaire Christo Wiese, South Africa’s fourth-richest man and biggest shareholder in the company. He became an investor after selling his African clothing chain Pep to Steinhoff in 2014, and has since led an acquisition drive around the world alongside long-term ally Jooste, who has been with the company since 1988. In addition to acquisitions like Mattress Firm, the company has made plays for appliance chain Darty in France and retailer Argos in the U.K.

Wiese, 76, didn’t immediately respond to calls to his office and mobile phone. He has a net worth of $4.3 billion, according to the Bloomberg Billionaires Index.

The findings have implications for Africa’s two largest retailers, Steinhoff Africa Retail Ltd., which was spun off from its parent in September, and grocery chain Shoprite Holdings Ltd,. in which Wiese is also the biggest shareholder. STAR, as Steinhoff Africa Retail is known, slumped as much as 29 percent in Johannesburg and said CEO Ben la Grange resigned. He’s also the chief financial officer of Steinhoff International.

“The trust between Wiese and Jooste is broken, that is why Jooste is out,” Syd Vianello, an independent retail analyst in Johannesburg, said by phone. “Wiese has got a huge amount of money at stake and it’s in his best interest to ensure trust in the company is restored.”

The retailer said Monday it wasn’t able to release audited full-year financial results on Wednesday due to matters related to a criminal and tax investigation in Germany. That probe dates back to 2015, and the company said in August that “no evidence exists” that the company broke the country’s commercial laws. It also said a report in Manager-Magazin that Jooste is among employees being investigated by German prosecutors contained information that was “wrong or misleading.”

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