Steinhoff Reports Former Chief Executive for Alleged Corruption -- Update

By Alexandra Wexler Features Dow Jones Newswires

Steinhoff International Holdings NV (SNH.JO) has reported its former chief executive to South African police for allegedly breaking anti-corruption laws, the company's acting chairwoman, Heather Sonn, told South Africa's Parliament on Wednesday.

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Markus Jooste, who served as Steinhoff's CEO for nearly two decades, resigned in December while Steinhoff announced unspecified accounting irregularities at the company, triggering a sharp sell-off of its shares. Steinhoff shares were recently 3.2% lower at 45 European cents, down 90% from this time a year ago.

Ms. Sonn said the chairman of Steinhoff's audit committee, Steve Booysen, had reported the alleged transgressions to authorities over suspected corrupt practices at the company. She didn't give any additional details during the hearing by three parliamentary committees, adding that the matter was now in the hands of the police.

A spokesman for the priority-crime unit of the South African police didn't immediately respond to a request for comment. Mr. Jooste declined an invitation to appear at the hearing and hasn't made any public comments since his resignation.

In December, Steinhoff hired accountancy firm PwC to conduct an independent investigation into the accounting irregularities. The company has since said that it needs to restate its 2015 and 2016 financial results, and has yet to release its 2017 results.

"PwC has been given an unrestricted scope with unlimited access to the group," Ms. Sonn said. "Their investigation will independently establish the facts of what went wrong."

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Ms. Sonn said that PwC should give guidance on the state of its investigation in the next few days. "We will be back and we will share," she said.

Former chairman Christo Wiese, Steinhoff's largest shareholder and one of South Africa's richest men, told the Parliament that Steinhoff's problems came "like a bolt out of the blue," and described the days after Mr. Jooste's resignation as "absolute turmoil."

The Johannesburg Stock Exchange, South Africa's Financial Services Board, the Department of Trade and Industry and the Companies and Intellectual Property Commission are all investigating Steinhoff.

"Fraud is extremely difficult to catch anywhere in the world," said Nicky Newton-King, chief executive of the Johannesburg Stock Exchange, where Steinhoff has a secondary listing.

The company is also facing a probe in Germany, where it moved its primary listing to in late 2015, amid allegations management used off-balance-sheet entities to hide losses in its operations and artificially pump up its valuation.

Oliver Griffin contributed to this article

Write to Alexandra Wexler at alexandra.wexler@wsj.com

(END) Dow Jones Newswires

January 31, 2018 06:19 ET (11:19 GMT)