Steinhoff International announces probe of 'accounting irregularities'

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Shares in Steinhoff, Poundland's South Africa-listed owner, have plummeted this morning as its chief executive quit amid news of an accounting probe.

Shares in Steinhoff International fell by about 60 per cent after the news was announced.

PSG Financial Services advised shareholders on Wednesday that its board of directors received and accepted the resignation of Jooste as a non-executive director of PSG Group and PSG Financial Services, with immediate effect.

Its European operation expanded previous year to include United Kingdom discount retailer Poundland.

Wiese, 76, and Jooste didn't immediately respond to calls to their mobile phones.

Steinhoff is a global giant with annual sales of more than €18 billion (and well over €1 billion in Australia).

Stories of the "accounting irregularities" surfaced first in 2015 and then again in August of this year in a German magazine that German authorities were investigating a claimed fraud.

The turmoil has implications for Steinhoff Africa Retail, which was spun off from its parent in September, and Shoprite, in which Wiese is also the biggest shareholder.

Jooste, who had been with Steinhoff since 1988 and was CEO of Steinhoff International since 2000, was credited with growing the South African furniture manufacturer and retailer into Europe's second-largest player, behind Ikea, via a string of acquisitions including France's Conforama chain.

Earlier this year, Steinhoff acquired a majority stake in mattress producer Sherwood Bedding, a family-owned company based in Fort Lauderdale, Fla.

The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared.

The company said in August that "no evidence exists" that Steinhoff broke Germany's commercial laws.

The company is involved in ongoing civil litigation - including with a former joint-venture partner - and the outcome "should result in monetary remedy to be paid by the group", Steinhoff said in August.

Steinhoff shares lost over 56% in trading on the Johannesburg stock exchange.

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