By Tehillah Niselow for Fin24
Steinhoff, once referred to as “the Ikea of Africa” and its former CEO Markus Jooste as the African Warren Buffet has seen a spectacular fall from grace since December when it revealed accounting irregularities in its books.
More than 95% of its market capitalisation has been wiped out and the international retailer faces angry investors, from public servant pension funds to Wall Street’s biggest banks.
Four months later, and there’s still no official word on what the accounting irregularities were, the former CEO Markus Jooste is yet to answer burning questions and the share price remains volatile.
The complex and opaque nature of the company, registered in the Netherlands, listed in Frankfurt and Johannesburg and headquartered in Stellenbosch have increased the difficulty in investigations.
Fin24 takes a look at the events of recent months which saw the once giant company, nearly collapse.
24 August 2017
• German media reports that German prosecutors are investigating whether Steinhoff inflated earnings.
• JSE listed shares fell 16% in intra-day trade.
• The company rejects the allegations in the report.
6 December 2017
• Disclosure of “accounting irregularities” and appointment of PricewaterhouseCoopers to investigate the financial statements.
• CEO Markus Jooste resigns, apologising to staff
• Share price dives on JSE by a record 62%, wiping out R117bn in the company’s market capitalisation.
7 December 2017
• Moody’s Investor Services cuts Steinhoff’s credit rating from “lowest investment grade” Baa3 to “highly speculative” B1 as a junk bond.
• Steinhoff’s second largest shareholder, the Public Investment Corporation’s (PIC) 56% stake is worth just R3.6bn. Two weeks prior it was worth R20bn.
• Steinhoff announces new sub-committee to improve governance, all of the 3 appointees are members of the board.
13 December 2017
• Steinhoff announces that the company’s 2016 financial statement can no longer be relied upon and will need to be re-stated.
• The Government Employees’ Pension Fund (GEPF) and its asset manager, the PIC, insist on having 2 representatives on Steinhoff’s board committee investigating the company.
14 December 2017
• Largest Steinhoff shareholder, chairperson and acting CEO Christo Wiese resigns from the board. Continues to insist that he was unaware of the accounting irregularities.
4 January 2018
• Steinhoff chief financial officer (CFO) Ben la Grange resigns.
8 January 2018
• European Central Bank sells entire holding of Steinhoff bonds. The ECB bought into Steinhoff Europe’s €800m bond issue in July 2017, when the bonds carried an investment grade rating. It had to sell due to the central bank’s requirements.
12 January 2018 to 17 January 2018
• JP Morgan, Citigroup, Bank of America and Goldman Sachs reveal losses relating to hundreds of millions of dollars in Steinhoff.
30 January 2018
• Former CEO Markus Jooste declines an invitation from the three parliamentary portfolio committees jointly probing Steinhoff, to appear before MPs saying he’s no longer involved in Steinhoff.
• Acting chairperson Heather Sonn tells MPs that Steinhoff has handed over evidence of fraud to the Hawks, against Jooste.
• Board and Christo Wiese say they are unable to reveal the state of affairs at Steinhoff, until PwC has completed its independent investigation.
12 February 2018
• Steinhoff’s former chairperson Christo Wiese involuntarily sells shares related to his margin loans reducing his shareholding in Steinhoff from 20.52% to 6%.
2 March 2018
• Moneyweb publishes leaked emails which show how former CEO Markus Jooste worked with other executives to move revenue figures around subsidiaries to boost their balance sheets and hide losses.
28 March 2018
• Hawks accuses Steinhoff board of “malicious compliance” with the law in handing over documents related to former CEO Markus Jooste, saying there was nothing contained in them to assist authorities with gathering evidence.
• Parliament’s joint committees probing Steinhoff resolve to subpoena Jooste as he twice declined an invitation to answer questions
5 April 2018
• Following public outrage, Steinhoff directors decide against the proposal to shareholders to reward themselves bonuses for working to restore the company after its collapse.
20 April 2018
• Annual General Meeting, in Amsterdam, Netherlands where the company’s board will for the first time come face to face with shareholders, since the December crash, and face tough questions about their handling of the crisis.