Steinhoff's Jooste Conspired With Other Executives, SZ Says

(Bloomberg) -- Steinhoff International Holdings NV former Chief Executive Officer Markus Jooste conspired with fellow executives at the retailer to move revenue figures around subsidiaries to boost their balance sheets, according to Sueddeutsche Zeitung.

Jooste, who quit in December after the company reported accounting “irregularities,” discussed how to manipulate accounts for the 2014 fiscal year, the German newspaper said, citing internal emails. The ex-CEO has been referred by Steinhoff to an anti-corruption police unit in South Africa, where the retailer is based, while auditors at PwC are investigating the company's accounts.

The owner of Mattress Firm in the U.S., Poundland in the U.K. and France's Conforama said Wednesday that PwC's probe, commissioned in December, is focusing on off-balance-sheet structures and deals, particularly related to the central European businesses. It's likely to find that some assets, revenue and profit figures have been overstated, Chairwoman Heather Sonn said. Steinhoff has said it's looking to restate accounts dating back to at least 2015, and hasn't reported financials for the last fiscal year.

Steinhoff has sent information received from German media enquiries to PwC “to ensure that the subject matter forms part of the investigation,” a spokeswoman said in an emailed response to questions. “Until PwC makes any findings in regard to this information, we are not in a position to engage in speculation about what their findings will be.”

Callie Albertyn, Jooste's lawyer at Cape Town-based De Klerk and Van Gend, couldn't immediately be reached for comment. Sueddeutsche said Jooste didn't comment.

According to the newspaper, the ex-CEO told one of his managers to add an additional 100 million euros ($122 million) of revenue from a subsidiary to help inflate the company's reported profit. In a separate email, the then-CEO referred to a need to “clean up the past,” the newspaper said.

Steinhoff shares crashed almost 90 percent in December after the company reported the wrongdoing without giving detail. It's reviewing the validity and recoverability of assets worth about 6 billion euros, and may need to take impairments over and above that, it said on Wednesday. The company has been in constant talks with lenders to maintain liquidity and keep its outlets in operation.

The stock slumped 12 percent to 0.36 euros as of 5 p.m. in Frankfurt. The company moved its primary listing to Frankfurt from Johannesburg in 2015 and is registered in Amsterdam.

--With assistance from Janice Kew

To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net.

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Antony Sguazzin at asguazzin@bloomberg.net, John Bowker, John Viljoen

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