Steinhoff shares plunge 66% as CEO quits amid accounting scandal

Poundland Parent Steinhoff Announces Investigation Into Accounting Irregularities

Steinhoff International's Supervisory Board has appointed chairman Christo Wiese as executive chairman on a temporary basis, while Pieter Erasmus, the former CEO of Pepkor Group, has joined Wiese in an executive advisory capacity "to assist with managing the group's various retail interests around the world", the company noted.

Star's share price fell 29% to R17.55 on Wednesday morning following the announcement of Jooste's departure. That deal alone has cost the chairperson R87.7m ($6.4m).

Steinhoff worldwide CEO Markus Jooste stepped down on Tuesday with German prosecutors saying a number of officials are now under investigation.

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

Wiese is South Africa's fourth-richest person with a net worth of $4.3 billion, according to the Bloomberg Billionaires Index.

Jooste had tendered his resignation with immediate effect, and the board had accepted it, Tuesday night's statement said.

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Jooste, who had been with Steinhoff since 1988, has previously been credited with growing the Steinhoff Holding's into Europe's second-largest player, through a series of acquisitions of home retail furniture chains.

Wiese borrowed €1.6 billion ($1.9 billion) to buy additional Steinhoff shares through a family trust in September 2016, pledging €3.2 billion of his existing holding as security to the investment banks that lent the money.

Steinhoff spun off its Africa business earlier this year, but retains a majority stake in the firm.

"I doubt Steinhoff will collapse", Owen Nkomo, CEO of Johannesburg-based money manager Inkunzi Wealth Group, said by phone.

It said it would also investigate whether previous financial results need to be corrected. That probe dates back to 2015, when German authorities raided the European headquarters in that country.

Steinhoff had denied the allegations when they surfaced again in August. According to the news agency Reuters, investors are now concerned that Wiese may be forced to sell shares he bought past year with borrowed money, which would depress Steinhoff's stock further.

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