Poundland parent reports former CEO on suspicion of corruption

The former chief executive of Poundland owner Steinhoff has been reported to the South African authorities by his old employer.

The company, which acquired the Black Country retailer in 2016 for £610m, has been mired in controversy since in revealed in December major accounting concerns.

The group’s shares plunged almost 85% when the affair was made public and concerns about the group’s standing have reached the highest levels of government.

In a briefing to the South African parliament, Steinhoff said that former CEO Markus Jooste had been reported to the Hawks – the South African body responsible for investigating organised crime, economic crime, corruption and other serious crime – on suspicion of breaching the Prevention and Combatting of Corrupt Practices Act.

Mr Jooste had resigned from the Steinhoff board on December once the affair came to light.

The South African group had already been under pressure, with German tax authorities having been investigating its operations for two years. The group’s main listing is on the Frankfurt stock exchange.

In the briefing to parliament, Steinhoff outlined the measures it had since the problems were first disclosed.

It said PwC had been given unrestricted scope to examine the group’s accounts.

“Their investigation will independently establish the facts of what went wrong,” it said.

“PwC has made good progress and in the next few days will advise what the focus of their further investigations will be.”

The group is also working with Deloitte to finalise the 2017 financial statements and the restated 2015 and 2016 results.

It said it had fully cooperated with regulators and would continue to do so.

The leadership structure of the group has been reorgainsed in the wake of the affair and it said it was looking to recruit an “internationally experienced” chief restructuring officer.

It said it had also stabilised its international clusters and near-term liquidity had been largely secured.

The group said the chairman of its audit committee had reported the “transgressions” to the South African authorities in terms of the Prevention and Combatting of Corrupt Practices Act.

“Based on our investigations to date, we have reported the former CEO, Markus Jooste, to the Hawks (on) suspicion that he has committed offences,” stated the briefing.

“The matter is now in the hands of the Hawks for further investigation and prosecution.”

It added: “We don’t know at this stage if this crisis could have been prevented. The PwC forensic investigation is ongoing and only once it has been finalised will we be able to publicly disclose the material findings, determine what went wrong and take steps against those responsible.”

It said it remain committed to restoring value to its shareholders.

Steinhoff operates 40 brands across more than 30 countries. In the UK, in addition to Poundland, it also owns Bensons for Beds and furniture retailer Harveys.

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