Steinhoff: PwC reviewing transactions
Steinhoff International said a review by auditors at PwC into its accounts is focused on certain off-balance sheet structures and deals with related parties and is likely to find that some assets, revenue and profit figures have been overstated.
As a result, it may need to take additional impairments to those related to €6 billion worth of assets already flagged.
Chairperson Heather Sonn said in a presentation on Wednesday the PwC probe into accounting irregularities, which appear to be concentrated in the Central European businesses, is ongoing and there’s no way of saying when it will be completed.
Steinhoff has been in constant talks with lenders to maintain liquidity and keep its outlets in operation after the emergence of accounting wrongdoing wiped almost 90% off its share price. Former CEO Markus Jooste has been referred by the company to SA’s anticorruption police unit. The retailer’s near-term liquidity needs have been met, Steinhoff said.
Steinhoff also announced that it was nominating six new members to its supervisory board to improve corporate governance, while four board members resigned, including founder Bruno Steinhoff. The company has said it will have to restate accounts going back to 2015.
One of the new appointments is Peter Wakkie, 69, the chair of TomTom. He was brought in by Royal Ahold NV as head of corporate governance after the Dutch retailer’s own accounting scandal in 2003.
Other proposed board members include Hugo Nelson, the former CEO of Coronation Fund Managers and Clive Thomson, who until recently ran Barloworld.
Steinhoff revenue fell 5% to €4.9 billion in the three months through December after the exclusion of the German unit Poco, which is related to a lawsuit brought by a former business partner. That included gains in Africa and at the Pepco and Poundland chains in Europe, although Mattress Firm’s US sales slumped 16%.– Bloomberg
Steinhoff has been in constant talks with lenders to maintain liquidity and keep its outlets in operation after the emergence of accounting wrongdoing wiped almost 90% off its share price.