Wiese must be

The Times (South Africa) - - Business -

● Stein­hoff In­ter­na­tional has re­vealed that its ac­count­ing er­rors stretch back into 2016, high­light­ing the ex­tent of wrong­do­ing at the cloth­ing and fur­ni­ture re­tailer that has led to an un­prece­dented stock slump.

Earn­ings for this year and last will have to be re­stated, the re­tail gi­ant said late on Wed­nes­day, prompt­ing the shares to slide anew. The is­sues re­late to “the va­lid­ity and re­cov­er­abil­ity of cer­tain Stein­hoff Europe bal­ance-sheet as­sets”, it said.

Stein­hoff is due to meet banks to nav­i­gate a way out of its cri­sis, which has wiped more than R160-bil­lion off the value of the com­pany. At stake are the fu­ture of 130 000 em­ploy­ees and in­ter­na­tional brands in­clud­ing Mat­tress Firm in the US, Pound­land in the UK and France’s Con­forama. Markus Jooste has quit as CEO, and Stein­hoff ap­pointed au­di­tor PwC to probe ac­count­ing ir­reg­u­lar­i­ties.

The shares de­clined 4.4% to R9.37 on Thurs­day and have slumped 80% since the ac­count­ing cri­sis emerged on De­cem­ber 5.

The Pub­lic In­vest­ment Cor­po­ra­tion, the sec­ond-largest share­holder with a 10% stake, has ques­tioned the in­de­pen­dence of the board and said bil­lion­aire chair­man Christo Wiese may have a con­flict of in­ter­est. Wiese, who has seen his wealth more than halve in a lit­tle more than a week, is run­ning the com­pany on an in­terim ba­sis.

Stein­hoff is star­ing down the bar­rel of more than R143-bil­lion of long-term debt and has been seek­ing breath­ing room from its lenders. Wiese has been try­ing to ne­go­ti­ate a stand­still agree­ment on a mar­gin loan of R24-bil­lion. The com­pany has gained the sup­port of some key lenders for ex­tra time to re­pay more than R16-bil­lion owed on a re­volv­ing credit fa­cil­ity.

Stein­hoff said last week that it was con­sid­er­ing boost­ing liq­uid­ity by sell­ing as­sets worth at least R16-bil­lion.

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