Alleged fraud investigation denied

SOUTH African furniture retailer Steinhoff yesterday dismissed a German magazine report that its chief executive was under fraud investigations, saying “substantial facts and allegation are wrong and misleading”. The monthly Manager Magazine, citing no sources, alleged that German prosecutors were investigating Markus Jooste and other senior managers at the retailer in connection with suspected accounting fraud. It said yesterday that prosecutors in the northern German city of Oldenburg have since 2015 been looking into whether revenues had been inflated in the group’s books. Steinhoff is Europe’s second-largest furniture retailer after IKEA. Steinhoff ’s German-listed shares dropped to a record low and were down 7.4 percent to €3.92 (R61.02) at 11.26am. Its Johannesburg-listed stock was down about 8 percent at its lowest in two-and-a-half years. The company’s bonds followed suit, with its 2025 €800 million notes slipping below face value, dropping 7 points in cash price terms to 93 cents to the euro, according to Tradeweb. Tax investigators searched the German offices of Steinhoff late in 2015. The company said at the time that authorities were reviewing the balance sheet treatment of certain transactions involving transfers of participations and intangible assets between its European business and third parties. The investigation are said to have focused on various transactions, each in the hundreds of millions of euros. – Reuters