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Poundland's parent company under investigation for accounting scandal

Published: 8 December 2017 - Kiran Grewal

Global retailer and parent company of Poundland, Steinhoff, has come under fire recently due to an investigation into an accounting scandal at Steinhoff International Holdings NV that has seen the value of the company decrease sharply by $11.4 million so far.

The accounting irregularities caused the resignation of the retailer's chief executive officer Markus Jooste, who owned the france-based Conforama furniture chain, Mattress Firm in the U.S. and Poundland in the U.K., shortly after an auditor was brought in to investigate further.

The retailer’s biggest shareholder is billionaire chairman Christo Wiese, who has stepped in to take temporary charge of the company. In addition to purchases like the U.K.’s Bensons for Beds, the company has made plays for appliance chain Darty in France and household-goods retailer Argos in Britain.

South African regulators have joined the investigation as Steinhoff has deep roots in the country; the Pretoria-based Financial Services Board has started an independent probe into possible false and misleading financial reports, Finance Minister Malusi Gigaba said in an emailed statement on Thursday, adding that he supports the inquiry.

Steinhoff, which employs about 130,000 people worldwide, announced Wednesday that it was delaying the release of its results as new information had come to light on a criminal and tax investigation in Germany. The retailer, which also has a base in Amsterdam, said in a statement that it had received expressions of interest in “certain non-core assets.” Steinhoff also said its African unit will formally commit to refinancing its long-term liabilities owed to the company, boosting liquidity further.

Earlier this year Poundland put UK discount chain 99p Stores - which it bought for £55m two years ago - into administration.

More news into the investigation as we get it.

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