Steinhoff drops 4 notches in Moody's credit ratings

Steinhoff drops 4 notches in Moody's credit ratings

The shares closed trading on the JSE at R46.25 on Tuesday before the company announced that it had approached PwC to launch an independent investigation into accounting irregularities, and that SA billionaire Christo Wiese would step in as executive chairperson in the interim following Jooste's resignation with immediate effect.

This wiped billions of dollars off its stock market value and raising questions about its liquidity and future.

Steinhoff shares have fallen more than 60% in a day, erasing $2.3 billion from Wiese's fortune.

Steinhoff has denied any wrongdoing in relation to the German allegations and said that they related to whether revenue was booked properly and taxable profit correctly declared.

Shares in the company were down 43% in South Africa and almost 40% lower in Germany.

"Incorporated in the Netherlands, Steinhoff is a vertically integrated retailer servicing value-conscious consumers and investing in complementary businesses".

He said he had asked for investigations by the Dutch Authority for the Financial Markets, Germany's Auditor Oversight Body and the Independent Regulatory Board of Auditors in South Africa into whether whether Deloitte in Germany or South Africa had complied with worldwide audit standards.

The disclosures from Steinhoff this week have stunned global institutional investors, and local shareholders big and small.

South African Deputy President Cyril Ramaphosa said the Steinhoff scandal was "catastrophic".

South Africa's Public Servants Association (PSA), which represents more than 230 000 members of the Government Employees' Pension Fund, said it was investigating suggestions that the fund may have lost about R12,5 billion through investments in Steinhoff.

The rating agency said its review will focus on the findings of Steinhoff's investigation into accounting irregularities and the consequences for the company's credit profile.

It is also seeking to reassure investors by saying it has enough liquidity to fund its existing operations.

He is best known for transforming budget grocer Shoprite from just six shops in the 1970s to hundreds of stores across Africa.

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