Investors are shell-shocked after the market witnessed a stunning crash today. Shares in the biggest retailer in Africa, Steinhoff, went into free-fall and fell by more than 61% as the JSE opened – plunging from R45.64 to around R17.50. The company fell even further during the day. This means that more than 130 billion was wiped off the company’s market capitalisation or value in one day. And R180 billion was wiped off all related companies combined. Well Steinhoff is a giant retailer that manages retail outlets such as Hifi Corporation and Timbercity. PEP and Ackermans were unbundled recently into a new company called Steinhoff African Retails or STAR. The core company has also become a global retail player through acquisitions across Europe and lags only behind IKEA. It’s shares listed in Frankfurt fell by more than 40% after the markets opened. Today’s meltdown comes after the board released a statement last night saying that information relating to accounting irregularities had come to light.
To add to the bombshell the CEO, Markus Jooste, has resigned.
And so has the CEO of STAR. The release of the company’s full year results, that was meant to take place today, was delayed indefinitely.
The chair of the board, Chriso Wiese, will run the company on a temporary basis. He is the biggest shareholder in the company who has lost the most. And if the share price does not recover it will also affect government pension funds that were invested in Steinhoff by the Public Investment Corporation.
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