Steinhoff Ex-CEO Says He Didn’t Know of Financial Irregularities

JOHANNESBURG (Capital Markets in Africa) – Steinhoff International Holdings NV ex-Chief Executive Officer Markus Jooste said he wasn’t aware of any financial irregularities and quit as head of the global retailer after disagreeing with the board on how to deal with a dispute with auditors Deloitte LLP.

In his first public appearance since the accounting crisis that wiped billions of euros of the company’s market value in December, Jooste challenged the widespread view that he is responsible for any wrongdoing. Instead, he blamed Deloitte for wanting an additional probe into allegations of financial mismanagement in Europe just days before the retailer was due to report 2017 financials.

 “My advice was to appoint new auditors and get accounts out by end January,” Jooste told lawmakers in Cape Town on Wednesday. He knew the alternative of failing to report full-year results — which eventually happened — would have a “disastrous impact,” he said. The board disagreed, and opted to appoint PwC to probe the accounts.

Steinhoff said Dec. 5 that it had uncovered accounting irregularities and that Jooste had quit. The shares have since crashed more than 95 percent and the company restructured about 10 billion euros of debt earlier this year to stave off collapse. The owner of Conforama in France and Mattress Firm in the U.S. has reported Jooste to South African police.

“To me, accounting irregularities means fraud,” Jooste said. “I was not aware of any accounting irregularities.”

The European financial investigations that concerned Deloitte originated in a dispute between Steinhoff and former partner Andreas Seifert, Jooste said. Steinhoff agreed to sell its half of the German furniture chain POCO to Seifert earlier this week, putting an end to that dispute.

Source: Bloomberg Business News