Steinhoff forced to restate further accounts

Steinhoff-Horslepy-Park-renderEmbattled South African Retailer, Steinhoff International, has warned that its accounting irregularities stretch back further than first thought, with the conglomerate forced to restate its accounts for 2015 and potentially prior years.

Steinhoff said the accounting irregularities which are the subject of an internal review and PwC investigation also affect the consolidated financial statements of Steinhoff Investment Holdings Limited by virtue of its ownership of certain European subsidiaries until 1 April 2016.

“Accordingly, the 2016 and 2015 financial statements of Steinhoff Investment Holdings Limited will need to be restated and can no longer be relied upon,” Steinhoff said in a statement.

“Furthermore, whilst the internal review and investigation into the accounting irregularities have not yet concluded, the restatement of the financial statements of Steinhoff Investment Holdings Limited for years prior to 2015 is likely to be required and investors in Steinhoff are advised to exercise caution in relation to such statements.”

Steinhoff said there is not timeline for the completion of the investigation.

“After careful consideration and taking into account the requirements of International Financial Reporting Standards (IFRS) guidelines and the advice of various advisors, the company wishes to confirm that the audited 2017 consolidated financial statements of the company will be accompanied by the restated 2016 consolidated financial statements.

“Whilst the internal review and investigation into the accounting irregularities have not yet concluded, the restatement of the financial statements of Steinhoff International Holdings Proprietary Limited for years prior to 2015 is likely to be required.”

Subsidiary company, Steinhoff Asia Pacific – which operates a number of high performing retail brands in Australia and New Zealand including Freedom, Fantastic Furniture, Best & Less, Snooze, Harris Scarfe, Plush, OMF, Postie and Bay Leather Republic – says it is financially strong but that it has appointed Minter Ellison and Ferrier Hodgson to provide legal, financial and corporate advice.

The owner of brands including Fantastic Furniture has hired financial advisers specialising in helping distressed companies, but says it remains profitable despite problems at its parent company.

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