Former Steinhoff CEO speaks up in court

Former Steinhoff International chief executive Markus Jooste recently appeared in South African parliament, disclosing he resigned from his position after the Steinhoff board proposed an internal investigation into accounting irregularities by auditing firm PricewaterCoopers, according to BusinessDay.za.

Jooste said that an earlier Deloitte investigation had already taken up much of his time and he would not see another investigation through. When the board decided to move forward with the PwC investigation, Jooste resigned.

He insisted that he unaware of any accounting irregularities when he left the group in December 2017.

The former chief executive noted that a joint venture with Dr. Andreas Seifert in 2007 was a “big mistake” and led in large part to the company’s woes, after the group was unable to complete financial statements in time due to financial losses and the perception of accounting irregularities.

Business settles debt with Seifert

Steinhoff International Holdings has reached an agreement to sell its share in the POCO furniture business to entities controlled by Seifert for a total consideration of €270 million ($436.8 million).

The two parties have been embroiled in litigation since Steinhoff terminated the joint venture in 2015, but in April, they agreed to settle the matter on “acceptable terms”.

POCO’s debt of €140 million ($226.5 million) will be transferred to the Seifert entities and will have no further impact on Steinhoff’s financials.

Steinhoff has taken aggressive steps to reduce its debt after it was found to have had a massive hole in its financials in December 2017, leading the company’s share price to plummet by almost 80 per cent.

Group representatives recently briefed the South African parliament on the progress that has made in reducing this debt, noting that the group has successfully repaid €2 billion ($3.24 billion) of the South African holding company’s debt and, save for Pepkor debt and working capital, has very limited African debt remaining.

A lock-up agreement has given the group extra time to implement a debt restructure, which would give the group financial stability until the end of 2021, according to the presentation to parliament.

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