Scandal-hit Steinhoff says it will suffer more in 2019

Credit: Reuters Studio
Published on June 19, 2019 - Duration: 01:21s

Scandal-hit Steinhoff says it will suffer more in 2019

Steinhoff International warned of the lingering damage from a massive accounting scandal after the South African retail group reported a $1.3 billion annual loss, sending its volatile shares down 8 percent.

Pascale Davies reports.


Scandal-hit Steinhoff says it will suffer more in 2019

South African retailer Steinhoff has already been marked by an accounting scandal - but the firm says it's set to suffer more this year.

A much delayed earning report revealed a 1.3 billion dollar annual loss for 2018.

It said the scandal had a quote "severely negative" impact on its results.

Earnings reports for 2017 and 2018 were repeatedly delayed following the outcome of an investigation by auditor PWC after Steinhoff said it found holes in its accounts.

The probe found that eight people, including former Steinhoff executives, were involved in a scheme where potential inter-company transactions worth more than $7 billion dollars were fraudulently recorded as external income.

That's so it could prop up profits and hide costs in money-losing subsidiaries.

The company's Johannesburg-listed shares fell 8 percent on Wednesday's (June 19) earnings news.

But the impact was felt across continents.

Steinhoff also owns Mattress Firm in the U.S., Fantastic chain in Australia, and Conforama in France.

And in Frankfurt, where it's also listed, shares fell more 10 percent, before recovering some ground.

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