Steinhoff’s 1st major setback
Steinhoff International lost a case against a former business partner related to how it reported financials for 2016, the first major legal setback for the global retailer as it battles an accounting scandal.
It should amend its accounts for that year, the Amsterdam Enterprise Chamber ruled on Monday, in a case brought by Andreas Seifert’s OM Handels and MW Handels businesses. The lawsuit pre-dates the reporting by Steinhoff of financial wrongdoing.
OM had accused Steinhoff of committing false accounting by not acknowledging its shareholdings in POCO Einrichtungsmarkte GmbH, a German furniture retailer. It’s one of three European cases Seifert’s businesses have brought against Steinhoff, which reported wider financial wrongdoing in early December.
Steinhoff has already said it needs to restate 2016 accounts alongside financials for 2015 and 2017. It’s being investigated by regulators and courts in various jurisdictions.
The retailer was told by the Dutch Enterprise chamber to amend its reporting of POCO to reflect that it has a 50% controlling interest instead of 100%, Steinhoff stated.
The company said it’s studying the judgment and whether there are grounds to appeal, while considering the impact.– Bloomberg
Moneyweb
An apparent implosion in cryptocurrency prices early this year and on-going price volatility have done little to deter SA traders, investors and enthusiasts.
Bitcoin, the largest cryptocurrency by market share, surged over 900% last year to peak just below $20 000 in December, only to fall drastically in the new year.
In January alone, its market capitalisation fell by over $44 billion amid concerns over South Korea’s new regulations, a proposed trading ban in India, a US exchange investigation and a Facebook ban on digital currency adverts.
Cryptocurrency prices have ticked up from their January lows.
Cryptocompare shows rand activity in the bitcoin market spiked amid uncertainty, with over R6 billion – a record high monthly volume – being traded in January. Local exchange Luno, which Cryptocompare says facilitates some 97% of rand-denominated trades, recorded one of the highest trading volumes in the rand-bitcoin pair during the period.
It appears not all trades saw bitcoin holders taking their money (or what was left of it) and running. “Generally speaking, whenever there’s a big upswing in prices — as we saw in November and December — there is a big increase in customer deposits. That said, the data doesn’t show that rand withdrawals increase by the same amount during downturns — as happened over the past few weeks,” said Luno’s Werner van Rooyen.
He said although there’s likely to have been euphoric buying and panic selling during the drastic swings, most bitcoin holders are used to price volatility.
Bankymoon’s Lorien Gamaroff said much of the volatility is a result of regulatory uncertainty and shallow market dynamics.
“Cryptocurrencies exist in a regulatory grey zone and so sentiment is easily changed when confronted with both positive and negative news. The market caps of these currencies are relatively small and so low amounts of selling and buying result in large movements in price.”
“This accentuates the panic selling and euphoric buying, which contributes to the epic volatility that typifies these markets.”
According to FOUNDeRY’s Farzam Ehsani, price volatility is here to stay. “Volatility is an indispensable part of the price discovery process of this new asset class … We should expect this type of volatility to continue for a lot longer as the asset class matures.”
A new S&P Global Ratings report states cryptocurrencies, in their current version, have characteristics of a traditional bubble. Its analysts say retail investors would be the first to bear the brunt of a collapse in the market value of cryptocurrencies, as rated banks’ exposure to the market is limited.
This writer has holdings in cryptocurrencies.
Steinhoff has been accused of committing false accounting by not acknowledging OM Handels and MW Handels shareholding in a German furniture retailer.